Shelf mix decision Superstore is a large discount supermarket. Profits have de¬ clined, so the manager has collected data on revenues and costs for different food categories. The data below pertain to some of the frozen foods that Super¬ store sells. To facilitate comparisons, the manager has listed average price and cost information for each category in equivalent square-foot packages.

REQUIRED

(a) Given the manager's constraints, and assuming that the store can sell what¬ ever is displayed on the shelves, what shelf mix (what number of square feet for each category above) will maximize Superstore's contribution margin from these four categories?

(b) What other factors might the manager consider in deciding on the amount of shelf space per category?(LO 2, 3)

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FROZEN FROZEN Selling price per unit (square-foot package) ICE CREAM JUICES DINNERS VEGETABLES $12.00 $13.00 $24.00 $9.00 Variable costs per unit (square-foot package) $8.00 $10.00 $20.50 $7.00 Minimum square footage required 24 24 24 24 Maximum square footage allowed 100 100 100 100 The manager wants a maximum of 250 square feet devoted to the four categories above.