THE MAXIMISATION OF REVENUE FROM NEW ZEALAND SALES OF BUTTER ON THE UNITED KINGDOM MARKET - A DYNAMIC PROGRAMMING PROBLEM

The objective of this paper is to consider and illustrate the potential usefulness of the method of analysis known as Dynamic Programming in one field of market analysis. The illustrative problem solved is that of maximising revenue from New Zealand sales of butter on the United Kingdom market. Since April 1962 the United Kingdom has restricted imports of butter by placing quotas for twelve month periods on importing countries. It is reasonable to assume that under normal supply conditions, these quotas will be fulfilled. Under abnormal conditions, such as those due to the winter experienced in the Northern Hemisphere in 1962-63, a good market information service should make it possible to predict the expected level of supply of butter from the countries concerned. United Kingdom producers are not subject to any restriction as to the quantity of butter sold on the home market, but the expected level of supply should be predictable in any year.