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Each morning, Nick Rouse stocks the drink case at Nick's Beach Hut in Myrtle Beach, South Carolina. The drink case has 85 linear feet of
Each morning, Nick Rouse stocks the drink case at Nick's Beach Hut in Myrtle Beach, South Carolina. The drink case has 85 linear feet of refrigerated drink space. Each linear foot can hold either seven 12-ounce cans or three 20-ounce bottles. (Click the icon to view the information on the cold drinks.) Nick's Beach Hut can sell all the drinks stocked in the display case each morning. Read the requirements. Requirement 1. What is Nick's Beach Hut's constraining factor? What should Nick stock to maximize profits? The constraining factor is linear feet of shelf space What should Nick stock to maximize profits? Complete the product mix analysis to determine which product would maximize Nick's profits. Yummy Time Yummy Time Vitamin Plus 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 Nick's Beach Hut sells three types of cold drinks: 1. Yummy Time in 12-oz. cans for $1.65 per can 2. Yummy Time in 20-oz. bottles for $2.00 per bottle 3. Vitamin Plus in 20-oz. bottles for $2.35 per bottle Nick's Beach Hut pays its suppliers: 1. $0.30 per 12-oz. can of Yummy Time 2. $0.40 per 20-oz. bottle of Yummy Time 3. $0.50 per 20-oz. bottle of Vitamin Plus Nick's Beach Hut's monthly fixed costs include: Hut rental $ 350 Refrigerator rental 80 Nick's salary 1,500 $ 1,930 Total fixed costs . Requirements 1. What is Nick's Beach Hut's constraining factor? What should Nick stock to maximize profits? 2. Suppose Nick's Beach Hut refuses to devote more than 55 linear feet to any individual product. Under this condition, how many linear feet of each drink should Nick's stock? How many units of each product will be available for sale each day
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