Optimising Resource Allocation in SMMEs: A Linear Programming Approach for SA Petro

This paper explores the application of linear programming (LP) as a strategic tool for enhancing profitability in SMMEs, explicitly focusing on SA Petro, a South African Johannesburg startup. The primary objective is to optimise SA Petro's deployment of its delivery resources to maximise their profit. Data was collected from SA Petro through interviews with the organisation's CEO, including company records and synthesised into information tables that informed the formulation of the LP model. The LP model was solved using QM for Windows. According to the optimal solution, SA Petro should deliver 150,000 litres of diesel by truck, 120,000 litres by train, and the remaining 730,000 litres by pipeline, yielding a projected profit of R555,000. Reviewing the sensitivity analysis, since all the logistics resources are still surplus at the given production level, the optimal strategy for SA Petro would be to accept more orders up to a feasible upper limit of 1,270,000 litres. This increase will enable the company to deploy the unused logistic resources. The study yields meaningful insights into the combination of product distribution options that will optimise operations for SA Petro.