Profit and Loss Optimisation
applied
Develop cost functions and explore the profits.
Introduction
Economic Optimization: The Chocolate Problem You're selling chocolates at a party. At 1€ each, nobody will buy. Free? You'll give away 30 at most. There are costs: ingredients, kitchen fees. What price maximizes your profit?
Guiding Questions
- What is the objective function you want to optimize?
- What constraints apply to this problem?
- How can you use calculus to find maximum or minimum values?
- Can you verify your solution is optimal rather than a local extremum?
- How sensitive is the optimal solution to changes in parameters?
Key Mathematical Concepts
Optimization
Business Mathematics
Calculus
Economics