Describe the Optimisation of managerial economics

Optimisation techniques are perhaps the most vital to managerial decision making. Given that alternative courses of action are available, manager attempts to produce the most optimal decision, consistent with stated managerial objectives. So an optimisation problem can be stated as maximising an objective (known as the objective function by mathematicians) subject to specified constraints. In considering the output level consistent with the maximum profit, firm maximises profits, constrained by capacity and cost considerations. Whereas a manager doesn't resolve the optimisation problem, he or she can make use of the results of mathematical analysis. In profit maximisation illustration, profit maximising condition necessitates that firm select the production level at which marginal revenue equals marginal cost. This condition is attained from an optimisation technique/model.

The techniques of optimisation used depends on the problem a manager is trying to solve.