Product Mix Optimization of a Footwear Company Using Activity-Based Costing Information

The development and success of companies hinge on their capacity to deal with both external and internal uncertainties. Management accounting and optimization models can contribute to the success of any organization. In this paper, information from the Activity-Based Costing is used in the development of an optimization model, to determine the optimum product mix of a company in the Footwear Industry. The proposed methodology was implemented in a spreadsheet solver and real data was used to test it. This tool allows the company to decide on which products to produce and in what quantities. Further, it indicates the unused capacity of the resources, thus allowing the company to adopt strategic measures to the demand for the products.