Constraints, Managerial Accounting

Constraints

1) A constraint of the type ≤ (≥) can be converted to an equation by adding a slack variable to (subtracting a surplus variable form) the left side of the constraint.

For illustration, in the constraint: XI + 2X2 ≤ 6 we add a slack SI ≥ 0 to the left side to obtain the equation: XI + 2X2 + SI = 6,     SI ≥ 0.

If the constraint represents the limit on the usage of a resource, SI will represent the slack or unused amount of the resource.

After that consider the constraint: 3XI + 2X2 - 3X3 ≥ 5, we subtract a surplus variable S2 ≥ 0 from the left side to obtain the equation.
3XI + 2X2 - 3X3 - S2 = 5, S2 ≥ 0

2) The right side of an equation can always be made non-negative by multiplying both sides by -1.

For illustration, 2XI + 3X2 - 7X3 = -5 is mathematically equivalent to -2XI - 3X2 + 7X3 = +5.

3) The direction of an equation is reversed when both sides are multiplied by -1. For illustration, whereas 2 < 4, -2 > -4. Thus the inequality 2XI - X2 ≤-5 can be replaced by -2XI + X2 ≥ 5.

Posted Date: 12/7/2012 6:15:01 AM | Location : United States







Related Discussions:- Constraints, Assignment Help, Ask Question on Constraints, Get Answer, Expert's Help, Constraints Discussions

Write discussion on Constraints
Your posts are moderated
Related Questions
Planning Planning is the fundamental function of the management by means of which the managers decide: What goals are to be accomplished How they will be accomplished.


Logan Products computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 39,000 direct labor-hours would

Explain Direct labor cost standard The setting up of standard labor cost for each product would require: a) The determination of budgeted fixed overhead for a period b) B

Credit Limit A credit restriction is the maximum amount of credit that the firm will extend at a point of time. This indicates the extent of risk taken through the firm through

Analysis of Financial Ratios: Ratios are computed to find out the customer's liquidity position and capability to repay debts. The computed ratios must be compared along with the

Problem From the following data, calculate overhead variances of following: (a) Variable overhead expenditure variance (b) Fixed overhead expenditure variance (c) Total ov

Case study of Orion Financial Management - Portfolio Management? Maria Gilbert is a principal in the company of Orion Financial Management. For 20 years she was chief investm


Determine the Profitability ratios in relation to investment a) Return on capital employed/ return on investment b) Return on equity or return on equity share holders' funds