Each morning,

Ned

Smith

stocks the drink case at

Ned's

Beach Hut in

Galveston, Texas.

Ned's

Beach Hut has

125

linear feet 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.

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The beverage stand can sell all drinks stocked in the display case each morning.

Read the requirements

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Question content area bottom

Part 1

Requirement 1. What is the constraining factor at

Ned's

Beach Hut? What should

Ned

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

number of customers per day

number of grand-cola cans

number of organic-ade bottles

number of right-cola bottles

.

Ned's

should stock the drink with the

highest

lowest

contribution margin.

Data table The beverage stand sells three types of cold drinks: 1. Grand - Cola in 12-oz. cans for $1.40 per can 2. Organic - Ade in 20-oz. plastic bottles for $1.80 per bottle 3. Right - Cola in 20-oz. glass bottles for $2.20 per bottle Ned's Beach Hut pays its suppliers the following: 1. $0.20 per 12-oz. can of grand-cola 2. $0.40 per 20-oz. bottle of organic-ade 3. $0.65 per 20-oz. bottle of right-cola Ned's Beach Hut's monthly fixed expenses include the following: Hut rental.. 360 Refrigerator rental 85 1,550 Ned's salary... 1,995 Total fixed expenses Data table The beverage stand sells three types of cold drinks: 1. Grand - Cola in 12-oz. cans for $1.40 per can 2. Organic - Ade in 20-oz. plastic bottles for $1.80 per bottle 3. Right - Cola in 20-oz. glass bottles for $2.20 per bottle Ned's Beach Hut pays its suppliers the following: 1. $0.20 per 12-oz. can of grand-cola 2. $0.40 per 20-oz. bottle of organic-ade 3. $0.65 per 20-oz. bottle of right-cola Ned's Beach Hut's monthly fixed expenses include the following: Hut rental.. 360 Refrigerator rental 85 1,550 Ned's salary... 1,995 Total fixed expenses