Designing a Production Line to Maximize Profit

The relationship between profitability and efficiency in a production line is discussed at length for the continuous production model. We prove that a solution which maximizes efficiency will not necessarily maximize profit. Several useful relationships between profitability and efficiency are developed which can greatly enhance computational efficiency. A solution procedure is developed which will determine the optimal number of work stations by maximizing an assumed profit function. An example is provided to illustrate these relationships and the entire solution procedure.