Using linear programming approach for solution of product mix problem which is based on activity based costing in a textile company

Because of the intense competition environment in the textile sector, customer?s requirements and demands have changed in the course of time. Therefore product variety increases invariably.The aim of this work, is providing to administrate the production portfolio scientificially. A production mix model was designed using the linear programming approach to give targets to sales department for selling the products which was developed for a collection period to provide maximum income.The objective function was designed to provide profit maximization in the scope of linear programming studies. As the cost of productions, costs which were calculated with the activity based costing approach, were used.The model implemented in an integrated textile company. That model contains 60 products and 22 different processes that are yarn production, dyeing, weaving, finishing, quality control and outsourcing processes as capacity constraints. With the best and the worst sales forecasts for products, sales intervals were determined as sales constraints of model.On the upshot model provides determining the most profitable production mix. Determined production mix is used for sales target. By this way, configurating the production development and sales strategies of companies, will change.