Lesson 2: Time, Production and Profits

Is there a minimum time I can operate my plant before I realize a profit?

Yes!

Actually there is a minimum time and minimum number of goods to produce in order to make a profit - and both depend on your TPNC (total non-production costs) and your PF (profit factor).

Consider the chart below:

where Tu is the time your plant takes to turn out a unit good.

PF = your profit factor (we'll discuss this very important variable next week!)

TPNC = total non production costs e.g. transport costs

T min is measured in hours or convenient units of time

P min in measured in goods or units.

IMPLICATIONS: Producing LESS than P min will run your business into a loss! Likewise, running your plant for less than T min will run you into a loss, so:

• Always be mindful of these factors to keep operating optimally

Add me to your circles or follow me on Twitter @MontyDimkpa to learn more.

Watch the YouTube tutorial:  http://youtu.be/zjDJrLiUU0Y

Best,

M.