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Each morning, Max Cole stocks the drink case at Max's Beach Hut in Newark, New Jersey. Max's Beach Hut has 100 linear feet of
Each morning, Max Cole stocks the drink case at Max's Beach Hut in Newark, New Jersey. Max's Beach Hut has 100 linear feet of refrigerated display space for cold drinks. Each linear foot can hold either five 12-ounce cans or three 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 Max's Beach Hut? What should Max stock to maximize profits? What is the maximum contribution margin he could generate from refrigerated drinks each day? The constraining factor is . Max's should stock the drink with the Requirements contribution margin. Data table - 1. What is the constraining factor at Max's Beach Hut? What should Max 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 Max refuses to devole more than 60 linear feet and no less than 10 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. Grand-Cola in 12-oz. cans for $1.45 per can 2. Fizzle Pop in 20-oz. plastic bottles for $1.80 per bottle 3. Tobe-Cola in 20-oz. glass bottles for $2.30 per bottle Max's Beach Hut pays its suppliers the following: 1. $0.15 per 12-oz. can of grand-cola 2. $0.40 per 20-oz. bottle of fizzle pop 3. $0.65 per 20-oz. bottle of tobe - cola Max's Beach Hut's monthly fixed expenses include the following: Print Done Hut rental Refrigerator rental S 350 85 1,750 Max's salary S 2,185 Total fixed expenses
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