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BUSINESS PERFORMANCE MANAGEMENT USING MODEL FOR PROFIT OPTIMIZATION

Berislav Bolfek and Biljana Loncaric ()
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Biljana Loncaric: Slavonski Brod Tourist Board

Interdisciplinary Management Research, 2010, vol. 6, 28-36

Abstract: Performance management is an imperative for the management because their success in managing a company depends on achieved results. Therefore, it is very important that the management can always and at any moment affect business results, i.e. profit movement. Ordinarily, business results or profit monitoring does not seem to be a problem for the management, while taking various corrective actions directed at increasing profit is not that simple and this is a real problem for the management. The question that arises is what activities and what total number of these activities should be undertaken to achieve the planned level of profit. As one of the possible ways for solving this problem is to develop a Model for profit optimization, which should assist the management in performance managing. Model for profit optimization consists of two procedures for the optimization of profit based on the method of linear programming. This model finds the optimal relationship between the income from the sale of various products and services, so it is possible to determine exactly which incomes should be increased and in what measure it should be done. In this way the management gets a new opportunity to take corrective actions in time to achieve the goals of the business policy in terms of making profit.

Keywords: management; profits; linear programming (search for similar items in EconPapers)
JEL-codes: C61 L25 (search for similar items in EconPapers)
Date: 2010
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