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Can any body explain to me the example 1, part a of chapter 7 in course note P5 opentuition?
i can’t not find the solution
Hi @ddnguyen, I will try to explain to you in the simplest manner.
For part (a), first build up a contribution/ profit matrix table made up of two factors – the first factor being the normal demand, and the second factor being the fixed customer’s contract size.
Work up the profit figures by filling in all spaces. However, take note that your factory has a limited constraint of only producing 1,200 units. Since you are under a contract to supply a fixed number of units to your customer, you have to reduce the output for your normal demand. (ie. You can make 800 units for contracted customer, but only 300 units for normal demand).
After you worked everything out, it should be easy for you to proceed ahead with the other questions.
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