Each morning, Mark White stocks the drink case at Mark's Beach Hut in Myrtle Beach, South Carolina. The drink case has 90 linear feet of refrigerated drink space. Each linear foot can hold either seven 12-ounce cans or five 20-ounce bottles. (Click the icon to view the information on the cold drinks.) Mark's Beach Hut can sell all the drinks stocked in the display case each morning. Read the requirements. Requirement 1. What is Mark's Beach Hut's constraining factor? What should Mark stock to maximize profits? The constraining factor is What should Mark stock to maximize profits? Complete the product mix analysis to determine which product would maximize Mark's profits. Grand-Cola Grand-Cola Pretty Pop 12 oz. Cans 20 oz. Bottles 20 oz. Bottles Sales price per unit Variable cost per unit Contribution margin per unit Units per linear foot of shelf space Contribution margin per linear foot of shelf space Decision: Stock Requirement 2. Suppose Mark's Beach Hut refuses to devote more than 50 linear feet to any individual product. Under this condition, how many linear feet of each drink should Mark's stock? How many units of each product will be available for sale each day? (Abbreviation used: CM = contribution margin.) Mark's Beach Hut should stock its shelves as follows: First stock linear feet with the product that has the CM per linear foot - Next stock linear feet with the product that has the has the L C M per linear foot How many units of each product will be available for sale each day based on the product mixed determined in the preceding step? (For entries with a $0 balance, make sure to enter "0" in the appropriate cell.) Units for sale Grand-Cola in 12 oz. cans: cans Grand-Cola in 20 oz. bottles: bottles Pretty Pop in 20 oz. bottles: bottles 0 Requirements 1. What is Mark's Beach Hut's constraining factor? What should Mark stock to maximize profits? 2. Suppose Mark's Beach Hut refuses to devote more than 50 linear feet to any individual product. Under this condition, how many linear feet of each drink should Mark's stock? How many units of each product will be available for sale each day? 0 Data Table Mark's Beach Hut sells three types of cold drinks: 1. Grand-Cola in 12-oz. cans for $1.55 per can 2. Grand-Cola in 20-oz. bottles for $1.70 per bottle 3. Pretty Pop in 20-oz. bottles for $2.30 per bottle Mark's Beach Hut pays its suppliers: 1. $0.35 per 12-oz. can of Grand-Cola 2. $0.45 per 20-oz. bottle of Grand - Cola 3. $0.85 per 20-oz. bottle of Pretty Pop Mark's Beach Hut's monthly fixed costs include: 390 Hut rental Refrigerator rental Mark's salary Total fixed costs 65 1,700 2,155 $
