Profit maximization through product mixm anagement in Argentinean

Abstract

Abstract: Companies usually participate in diverse markets with different product lines, which -sometimes- are very similar and based on kindred production technologies, but -in other cases and because of their diversification- all these structures are very different. Thus, every product integrates a portion in the total production and sales mix, providing distinct benefits due to their dissimilar costs and prices. In this way, multi-producer companies face important challenges while determining the optimal product quantity to be manufactured and sold that, in the total sum, provide the maximum profit to their shareholders. Moreover, it becomes necessary to consider that there are market, technological, financial, productive, and logistic conditions which limit the participation of each product within the total mix. It was performed a bibliographical review, complemented by a field work. The hypothesis of this investigation -which was corroborated- indicates that it is possible to maximize profits through product mix management in Argentinean multi-production SME, understanding and applying properly simple concepts like the linear programming method. It provides SME’s executives the possibility to find the optimal mix that magnifies the firm’s economic outcomes. The methodology used was quali-quantitative, with a qualitative predominance. The research design was non-experimental -as variables were not operationalized- and transversal, as the information was obtained at a given moment in time.