Each morning, Nathan Preston stocks the drink case at Nathan's Beach Hut in Charleston, South Carolina. Nathan's Beach Hut has 115 linear feet thas 115 linear foot of refrigerated display space for cold drinks. Each linear foot can hold either six 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 cose each morning, Read the requirements Requirement 1. What is the constraining factor at Nathan's Beach Hut? What should Nathan stock to maximize profite? What is the maximum contribution margin he could generate from refrigerated drinks each day? The constraining factor is linear feet of sholf space Nathan's should stock the drink with the highest contribution margin Complete the product mix analysis to determine which product would maximize Nathan's profits. Nathan's Beach Hut Product Mix Analysis right-cola Ince bottled water 12. Cans $ 150 0.10 Sales price per unit orange soda 20 oz. Bottles 5 220 20 or Bottles $ 1.75 0.30 Variable cost per unit Contribution margin per unit 0.70 1.40 145 1.50 Units per linear foot of the space Contribution margin per linear foot of the space aximum cont than Preston stocks the drink case at Nathan's Beach Hut in Charleston cold drinks. Ead n to view the infl Data Table ind can sell all d ments The beverage stand sells three types of cold drinks: 1. Right-Cola in 12-oz. cans for $1.50 per can What is the cong 2. Bottled water in 20-oz. plastic bottles for $1.75 per bottle om refrigerated 3. Orange Soda in 20-oz. glass bottles for $2.20 per bottle factor is linear Nathan's Beach Hut pays its suppliers the following: 1. $0.10 per 12-oz. can of right-cola 2. $0.30 per 20-oz. bottle of bottled water duct mix analys 3. $0.70 per 20-oz. bottle of orange soda Nathan's Beach Hut's monthly fixed expenses include the following: Hut rental $ 355 Refrigerator rental 75 Nathan's salary 1,700 unit $ Total fixed expenses 2,130 runit rgin per unit Toot of shelf spad Print Done egin per linear fol sell all drinks stocked in the display case each morning Requirements the gera um lin kan 1. What is the constraining factor at Nathan's Beach Hut? What should Nathan 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 Nathan refuses to devote more than 75 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? unit Print Done elf near foot of shelf space
