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2.14 In the Ma-and-Pa grocery store, shelf space is limited and must be used effectively to increase profit. Two cereal items, Grano and Wheatie,
2.14 In the Ma-and-Pa grocery store, shelf space is limited and must be used effectively to increase profit. Two cereal items, Grano and Wheatie, compete for a total shelf space of 60 ft. A box of Grano occupies .2 ft and a box of Wheatie needs .4 ft. The maximum daily demands of Grano and Wheatie are 200 and 120 boxes, respectively. A box of Grano nets $1.00 in profit and a box of Wheatie $1.35. Ma-and-Pa thinks that because the unit profit of Wheatie is 35% higher than that of Grano, Wheatie should be allocated 35% more space than Grano, which amounts to allocating about 57% to Wheatie and 43% to Grano. What do you think? (2014)
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