The optimal decision for expanding the production scale

Abstract

Based on the partial distribution [Dai, F et al., 1986-2001], we put forward the optimal method of decision making to expand the production scales. We divide the producing cost into the variable cost and fixed cost. And design three cases: after the scale is expanded, fixed cost holds the line, variable cost holds the line, or both the fixed cost and the variable cost become lower averagely. We give the basic conditions and the method of optimal decision making for expending production scales under those three cases. The method in this paper is widespread suitable for all kinds of expanding the production scales. Two examples show, by the method, not only we can resolve the problems of expanding the general merchandise production scale, but also solve the problems of expanding scale of stock capitals.