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Profit Maximizing with Constrained Resources

Profit Maximizing with Constrained Resources. * MS Excel spreadsheets to this example available separately on the website. Example: Two Special Classes. Biology. Physics. Well, hurry up. Wait - I’m not done yet!. KKU Super Computer. Costs, Prices, etc. Scenarios.

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Profit Maximizing with Constrained Resources

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  1. Profit Maximizing with Constrained Resources * MS Excel spreadsheets to this example available separately on the website

  2. Example: Two Special Classes

  3. Biology Physics Well, hurry up. Wait - I’m not done yet! KKU Super Computer

  4. Costs, Prices, etc.

  5. Scenarios

  6. Scenario 1: No Constraints

  7. It is possible to calculate the Break-Even student numbers for both courses, as follows: * The problem does not ask you to solve for the B/E points, but they will help us to understand the solution. Notice that with no constraints (except the number of students that want to attend, profits are positive for both classes, and total profit is maximized.

  8. Biology Physics Problem: must limit students to 26! 50 Students maximum (demand = 48) 26 Students maximum (demand = 35) √ KKU Super Computer

  9. Scenario 2: Room Capacity is a Constraint (affecting Physics only!) Notice the Physics class is now losing money. Do it anyway?

  10. Biology Physics Tell your teachers that they can have 108 total hours, MAX! Well, hurry up. Wait - I’m not done yet! Oh No! Current demand = (1x48) + (3x26) = 126 hours! KKU Super Computer

  11. Scenario 3: Computer use constrained to 108 students hours maximum

  12. Scenario 3 – Wrong Answer for comparison

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