Trial Corner
(G; D)
TCM = €10G + €3D
1 2
3
(1,000; 800)
(1,000; 3,000)
(3,200; 800)
€10 (1,000) + €3 (800) = €12,400
*
€
10 (1,000) + 3 (3,000) =
19,000
*
€
10 (3,200) +
3 (800) =
€
34,400*
* Optimal solution is G = 3,200 and D = 800.
4
The optimal mix determined in requirement (3) will not change if the contribution margins per square metre change to grocery products, €8 and dairy products, €5. To avoid cluttering the graphic solution in Solution Exhibit 10.16, we demonstrate this using the trial-and-error solution approach.
Trial Corner
(G; D)
TCM = €8G + €5D
1 2
3
(1,000; 800)
(1,000; 3,000)
(3,200; 800)
€8 (1,000) + €5 (800) = €12,000
*
€8 (1,000) + €5 (3,000) = €23,000
*
€8 (3,200) + €5 (800) = €29,600*
* Optimal solution is still G = 3,200 and D = 800. The student can also verify, by drawing lines parallel to the line through G = 500 and D
= 800 (the equal contribution line for €4,000) that the furthest point, where the equal contribution line intersects the feasible region, is the point G = 3,200 and D = 800.
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