Recall the rod cutting problem.
Given a rod of length $n$ inches and a table of prices $p_{i}$ for $i=1,2,3,4,\,.\,.\,.$ determine the maximum revenue $r_n$ obtainable by cutting up the rod and selling the pieces. You may assume no cutting cost.
The following is a question from CLRS 15.1-2.
Show, by means of a counterexample, that the following ‘greedy’ strategy does not always determine an optimal way to cut rods. Define the density of a rod of length i to be p_i/i, that is, its value per inch. The greedy strategy for a rod of length n cuts off a first piece of length i, where 1≤i≤n, having maximum density. It then continues by applying the greedy strategy to the remaining piece of length n-i.
Consider prices up to length $4$ are $p_1=1, p_2=5, p_3= 8, p_4 = 9$ respectively. So, densities are $d_1=1, d_2 = 2.5, d_3= 2.67, d_4 = 2.25$ respectively.
If we are given a rod of length $4,$ then an optimal way of cutting the rod to maximize revenue is $2$ pieces of length $2$ each, generating $5+5 = 10.$
However, greedy algorithm above will suggest cutting the rod into 2 pieces of length $3$ and $1$, generating revenue $8+1=9.$
I obtain this example by merely following the same prices given in CLRS but do not understand why such greedy algorithm fails to provide optimal way of cutting the rod.