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in The beverage stand sells three types of cold drinks: 1. Right-Cola in 12-oz. cans for $1.40 per can 2. Energy Drink in 20-oz. plastic
in The beverage stand sells three types of cold drinks: 1. Right-Cola in 12-oz. cans for $1.40 per can 2. Energy Drink in 20-oz. plastic bottles for $1.80 per bottle 3. Value - Soda in 20-oz. glass bottles for $2.30 per bottle Larry'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 energy drink 3. $0.70 per 20-oz. bottle of value-soda Larry's Beach Hut's monthly fixed expenses include the following: $ Hut rental Refrigerator rental 345 60 1,800 Larry's salary Total fixed expenses 2,205 1. What is the constraining factor at Larry's Beach Hut? What should Larry 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 Larry refuses to devote more than 65 linear feet and no less than 20 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? Each morning, Larry Ivery stocks the drink case at Larry's Beach Hut in Newark, New Jersey. Larry's Beach Hut has 125 linear feet of refrigerated display space for cold drinks. Each linear foot can hold either five 12-ounce cans or four 20-ounce plastic or glass bottles. E: (Click the icon to view the information on the cold drinks.) The beverage stand can sell all drinks stocked in the display case each morning. Read the requirements Requirement 1. What is the constraining factor at Larry's Beach Hut? What should Larry stock to maximize profits? What is the maximum contribution margin he could generate from refrigerated drinks each day? . Larry's should stock the drink with the The constraining factor is contribution margin
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