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Each morning, Mike Root stocks the drink case at Mike's Beach Hut in Myrtle Beach, South Carolina. The drink case has 90 linear feet
Each morning, Mike Root stocks the drink case at Mike'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 three 20-ounce bottles. View the information on the cold drinks. MikeBeach Hut can sell all the drinks stocked in the display case each morning. Read the requirements. - X Requirement 1. What is Mike's Beach Hut's constraining factor? What should Mike's Beach Hut stock to maximize profits? The constraining factor is linear feet of shelf space What should Mike's Beach Hut stock to maximize profits? Complete the product mix analysis to determine which product would maximize Mike's Beach Hut's profits. Yummy Time 12 oz. Cans Yummy Time 20 oz. Bottles Pretty Pop 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 x Cold Drinks Information Mike's Beach Hut sells three types of cold drinks: Drink Sales Price Cost Yummy Time in 12-oz. cans $ 1.40 per can $ 0.05 per can Yummy Time in 20-oz. bottles 1.85 per bottle 0.30 per bottle Pretty Pop in 20-oz. bottles 2.40 per bottle 0.70 per bottle MikeBeach Hut's monthly fixed costs include: Hut rental $ 365 Refrigerator rental 80 Mike's salary 1,700 $ 2,145 Total fixed costs Requirements 1. What is Mike's Beach Hut's constraining factor? What should Mike's Beach Hut stock to maximize profits? 2. Suppose Mike'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 Mike's Beach Hut stock? How many units of each product will be available for sale each day?
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