A Graphical Approach to Price-Break Analysis—3

Abstract

The price-break problem is a non-linear discrete problem of two variables and three parameters which is not solvable analytically. As such, a graphical solution is suggested here by re-formulating the problem in two stages: first, as an equivalent non-linear, and next, as a linear problem of two variables and a single parameter. The later formulation affords an efficient graphical solution which was not possible earlier. In addition, useful procedures for plotting iso-cost curves and deriving approximate numerical solutions are also discussed.