Integration between Pricing, Product Mix, and Linear Programming in Business Decision-Making: A Case Study in a Tank and Sink Manufacturing Company

Abstract

Cost accounting still relies largely on traditional methods, limiting its integration with related fields such as economics and quantitative methods and reducing the usefulness of managerial information. This study investigates how the integration of product mix optimization, pricing, and linear programming can improve decision-making in construction companies. An exploratory and descriptive qualitative-quantitative case study was conducted in a manufacturer of tanks and sinks. Data were collected through field research, interviews, financial reports, and accounting statements. Product mix optimization was performed using the Excel 2021 Solver tool, based on variable costing and Cost-Volume-Profit (CVP) analysis. Three scenarios were compared: the actual product mix, a markup-adjusted product mix, and a product mix optimized through linear programming. The findings show that the proposed approach improves the analysis of contribution margin and break-even point, supports the prioritization of higher-profit products under resource constraints, enhances cost control and pricing decisions, and increases the effectiveness and efficiency of managerial decision-making. The study demonstrates the benefits of integrating cost accounting techniques with quantitative optimization methods to support managerial planning and control.