On the Limited Budget Problem

We consider the problem of planning a mix of products with a limited budget constraint. This problem is an extension of the well known product mix problem. The problem is easily formulated as a linear programming problem. In this paper we find the optimal solution by an explicit formula without applying any linear programming solution method. Therefore, very large problems can be easily solved. The problem is illustrated by an example. It can be used to demonstrate the usefulness of the dual problem in linear programming and the utility of using problem structure insight as a means to provide a more meaningful tool for management decision making. An Excel spreadsheet is constructed for illustrating the procedure in class.