Strategic decision-making at a steel manufacturer assisted by linear programming

We show how a linear programming model can assist strategic decision-making, understanding it either within the neoclassical theory of the firm, the industrial organization theory, the resource-based view, or other approaches of strategic management. The model relays on Activity Based Costing (ABC) for calculating unit product cost, and on dynamic Activity Based Management (ABM) for assessing the feasibility of prospective production plans. It was implemented 4 years ago in a Chilean integrated steel manufacturer, and it is currently being used to optimize its business plan.