A linear programming formulation is not valid for a product mix problem when there are setup costs for initiating production.

Question

Quizplus · Accepted Answer

A linear programming formulation assumes that there are no setup costs involved in producing different products. In reality, setup costs can have a significant impact on a company's decision-making process in determining the optimal product mix, and therefore a linear programming formulation may not be appropriate. Instead, a more advanced optimization technique, such as mixed-integer programming or dynamic programming, may be used to account for setup costs.

A Linear Programming Formulation Is Not Valid for a Product