Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Samantha, a sales agent of Babylon Ice cream, noticed that shelf space in the front refrigerator affects the sales of ice creams and

  



2. Samantha, a sales agent of Babylon Ice cream, noticed that shelf space in the front refrigerator affects the sales of ice creams and now she is trying to decide how much refrigerator space to devote to four different ice creams. Related data on these four ice creams are as follows: Light French Italian wwww Selling price per case $8.75 $10.50 $7.75 Variable cost per case $3.75 $6.50 $5.75 Organic $9.30 $6.30 Ice Cream cups sold per meter of shelf space per day 12 mmmmmmm 36 43 Samantha has a maximum front shelf space of 12 meters to devote to the four ice creams. She wants a minimum of 1 meter and a maximum of 6 meters of front shelf space for each ice cream. a. Calculate the contribution margin per cup of each type of ice cream. b. A friend of Samantha recommends that she should maximize the shelf space devoted to those ice creams with the highest contribution margin. Evaluate this recommendation. c. Keeping in mind the preference of Samantha (min. 1 meter and max. 6 meters), what shelf-space allocation for the four ice creams would you recommend in order to maximize total contribution margin? Show your calculations. 3. Babylon rents a delivery truck by paying monthly rental payment of $400 and the operating and other costs of the truck is $10 per kilometer. Draw the graph to show the cost line of delivery truck and write the cost equation.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Probability

Authors: Mark Daniel Ward, Ellen Gundlach

1st edition

716771098, 978-1319060893, 1319060897, 978-0716771098

More Books

Students also viewed these Finance questions

Question

Let S = {x: x is rational and x2 Answered: 1 week ago

Answered: 1 week ago

Question

Be honest, starting with your application and rsum.

Answered: 1 week ago

Question

Name three applications for feedback control systems.

Answered: 1 week ago

Question

Let X be Uniform on the interval [0, 1], and let Y = ex.

Answered: 1 week ago