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Each moming, Murry Stenback stocks the drink case at Murry's Beach Hut in Virginia Beach, Virginia. Murry's Beach Hut has 100 linear feet of refrigerated
Each moming, Murry Stenback stocks the drink case at Murry's Beach Hut in Virginia Beach, Virginia. Murry's Beach Hut has 100 linear feet of refrigerated display space for cold drinks. Each linear foot can hold either seven 12-ounce cans or four 20-ounce plastic or glass bottles. (Click the icon to view the information on the cold drinks.) The beverage stand can sell all drinks stocked in the display case each morning. Read the requirements. Requirement 1. What is the constraining factor at Murry's Beach Hut? What should Murry stock to maximize profits? What is the maximum contribution margin he could generate from refrigerated drinks each day? The constraining factor is linear feet of shelf space Murry's should stock the drink with the highest contribution margin. Complete the product mix analysis to determine which product would maximize Murry's profits. Murry's Beach Hut Product Mix Analysis Data table Calculator Requirements 1. What is the constraining factor at Murry's Beach Hut? What should Murry 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 Murry 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? The beverage stand sells three types of cold drinks: 1. Right-Cola in 12-oz. cans for $1.40 per can 2. Bottled water in 20-oz. plastic bottles for $1.75 per bottle 3. Value - Soda in 20-oz. glass bottles for $2.30 per bottle Murry's Beach Hut pays its suppliers the following: 1. $0.20 per 12-oz. can of right-cola 2. $0.35 per 20-oz. bottle of bottled water 3. $0.70 per 20-oz. bottle of value-soda Murry's Beach Hut's monthly fixed expenses include the following: $ Hut rental... Refrigerator rental Murry's salary... 360 85 1,500 $ 1,945 Total fixed expenses
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