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Methodology

Capacity-constrained Profit Mix Planner methodology

Allocate one scarce resource to the higher contribution per constrained unit, subject to demand limits.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Product AUnits
productAUnits = floor(allocated resource to A / A resource per unit), capped by A demand

Where

productAUnits
Product AUnits (operational units)Source: Calculated output
Product BUnits
productBUnits = floor(allocated resource to B / B resource per unit), capped by B demand

Where

productBUnits
Product BUnits (operational units)Source: Calculated output
Resource Used
resourceUsed = A units × A resource + B units × B resource

Where

resourceUsed
Resource Used (operational units)Source: Calculated output
Unused Resource
unusedResource = available resource − resource used

Where

availableResource
Available constrained resource (limiting-resource units/planning period)Source: Business record
resourceUsed
Resource Used (operational units)Source: Calculated output
unusedResource
Unused Resource (operational units)Source: Calculated output
Total Contribution Ex Tax
totalContributionExTax = A units × A contribution + B units × B contribution

Where

totalContributionExTax
Total Contribution Ex Tax (currency units, ex tax)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

The worked rows below come directly from the registered engine and visible default fixture.

Calculation and outputs

Example

The worked rows below come directly from the registered engine and visible default fixture.

Product AUnits
233 units
Product BUnits
800 units
Resource Used
1,499 units
Unused Resource
1 units
Total Contribution Ex Tax
41,980 currency units

The exact engine-derived outputs are shown in the labelled rows below.

Interpretation

Total constrained contribution allocates the scarce resource to contribution per constrained unit within both demand limits.

3. Validation and boundary checks

  • All inputs must be finite and within the visible boundaries.
  • Costs, revenue and contribution use one consistent ex-tax basis and planning period.
  • Whole-unit thresholds round upward only where the named engine formula requires it.

4. Assumptions and source classification

  • All prices, costs, demand limits and capacity values are user-supplied records or explicit scenarios.
  • Allocated costs remain visible and separate from avoidable costs.
  • The global workflow infers no market benchmark, policy threshold or future demand.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The model does not forecast demand, implementation timing, service quality or strategic fit.
  • It does not replace accounting, tax, legal or financial advice.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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