Eachmorning,

Nathan

Stenback

stocks the drink case at

Nathan's

Beach Hut in MyrtleBeach, South Carolina. The drink case has

95

linear feet of refrigerated drink space. Each linear foot can hold either

six

12-ounce cans or

three

20-ounce bottles.

Nathan's

Beach Hut can sell all the drinks stocked in the display case each morning.

Read the

Requirement 1.What is

Nathan's

BeachHut's constrainingfactor? What should

Nathan

stock to maximizeprofits?

The constraining factor is

linear feet of shelf space

.

Part 2

What should

Nathan

stock to maximizeprofits?

Complete the product mix analysis to determine which product would maximize

Nathan's

profits.

	Yummy Time	Yummy Time	Vitamin Plus
	12 oz. Cans	20 oz. Bottles	20 oz. Bottles
Sales price per unit		$1.45		$2.00		$2.40
Variable cost per unit		0.25		0.45		0.80
Contribution margin per unit		1.20		1.55		1.60
Units per linear foot of shelf space		6		3		3
Contribution margin per linear foot of shelf space		$7.20		$4.65		$4.80

Stock

all 12 oz. cans of Yummy Time

.

Part 4

Requirement 2.Suppose

Nathan's

Beach Hut refuses to devote more than

65

linear feet to any individual product. Under thiscondition, how many linear feet of each drink should

Nathan's

stock? How many units of each product will be available for sale eachday?(Abbreviation used: CM= contributionmargin.)

Nathan's

Beach Hut should stock its shelves asfollows:

First stock	65	linear feet with the product that has the	highest	CM per linear foot	12 oz. cans of Yummy Time
Next stock	30	linear feet with the product that has the	middle	CM per linear foot	20 oz. bottles of Vitamin Plus

Part 5

How many units of each product will be available for sale each day based on the product mixed determined in the precedingstep? (For entries with a$0 balance, make sure to enter"0" in the appropriatecell.)

Yummy Time in 12 oz. cans:		cans
Yummy Time in 20 oz. bottles:		bottles
Vitamin Plus in 20 oz. bottles:		bottles