Business, 06.04.2020 23:27, gamboaserg

Each morning, Joe stocks the drink case at Joe's Beach Hut in Daytona Beach comma Florida. Joe's Beach Hut has 95 linear feet of refrigerated display space for cold drinks. Each linear foot can hold either five 12-ounce cans or four 20-ounce plastic or glass bottles. The beverage stand sells three types of cold drinks:

1. Cola - Cola in 12-oz. cans for $ 1.45 per can

2. Organic - Ade in 20-oz. plastic bottles for $ 1.65 per bottle

3. Tobe - Cola in? 20-oz. glass bottles for $ 2.10 per bottle

Joe's Beach Hut pays its suppliers the? following:

1. $ 0.10 per 12-oz. can of cola - cola

2. $ 0.35 per? 20-oz. bottle of organic - ade

3. $ 0.70 per? 20-oz. bottle of tobe - cola

Joe's Beach Hut's monthly fixed expenses include the following:

Hut Rental $355

Refrigerator Rental 70

Nedâ€™s Salary 1,800

Total fixed expenses $2,225

Requirements:

1. What is the constraining factor at Joe's Beach Hut? What should Joe stock to maximize? profits? What is the maximum contribution margin he could generate from refrigerated drinks each day?

2. To provide variety to customers, suppose Joe refuses to devote more than 60 linear feet and no less than 5 linear feet to any individual product. Under this condition, how many linear feet of each drink should be stocked? How many units of each product will be available for sale each day?

3. Assuming the product mix calculated in Requirement? 2, what contribution margin will be generated from refrigerated drinks each? day?

Answers: 1

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Each morning, Joe stocks the drink case at Joe's Beach Hut in Daytona Beach comma Florida. Joe's Bea...