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Optimizing Cookie Profits (do not consider any of the data from the previous questions when answering the questions below) Typically Subway stores sell other items

Optimizing Cookie Profits (do not consider any of the data from the previous questions when answering the questions below)

Typically Subway stores sell other items besides subs. Suppose they have a display case where they offer cookies for dessert. The case is 24 inches long across the front and holds 5 flavors of cookies, stacked 24 cookies deep for each flavor of cookie. Currently they offer the following flavors of cookies:

Sugar Cookie

Double Chocolate Chip

Oatmeal Raisin

White Chip Macadamia Nut

Peanut Butter

Cookies sell for $.65 each. Subway purchases the frozen raw cookies from their supplier but each variety has a different cost. This is driven by variation in ingredient costs, for example Macadamia nuts are very expensive so those cookies cost more. So do the chocolate chip cookies (due to the chocolate chips) and the oatmeal (due to the raisins). Most cookies take up 4 inches each of linear display case space, except the Peanut butter cookie is bigger and takes up 6 inches, for a total of 22 inches utilized out of the 24 inch display case. The Peanut butter cookie just spreads out more when it is cooked so is bigger.

Current Display Case Layout

24 Sugar cookies

24 Choc Chip

Cookies

24 Oatmeal

Cookies

24 Macadamia Nut Cookies

24 Peanut Butter Cookies

Empty space

4 inches

4 inches

4 inches

4 inches

6 inches

2 inches

Subway is considering narrowing their cookie selection to increase profitability. Typically they sell out of their entire stock of cookies in any one day so if they discontinue one flavor, they can replace it by selling more of another. Having said that, the company feels like they should offer at least three varieties of cookie flavors to keep their customers interested in ordering them repeatedly on every visit. Variety is the spice of life!

Cookie

Sales Price

Unit Cost

Linear Display Case Space

Sugar

$.65

$.14

4 inches

Double Choc Chip

$.65

$.17

4 inches

Oatmeal Raisin

$.65

$.15

4 inches

White Chip Mac Nut

$.65

$.20

4 inches

Peanut Butter

$.65

$.14

6 inches

What is the ranking of cookies, from most profitable (1st) to least profitable (5th)? (Hint: remember the constrained resource!) (When dividing numbers, round the answer to four decimal places)

Group of answer choices

Sugar

[ Choose ] 2 4 1 5 3

Double Chocolate Chip

[ Choose ] 2 4 1 5 3

Oatmeal Raisin

[ Choose ] 2 4 1 5 3

White Chip Mac Nut

[ Choose ] 2 4 1 5 3

Peanut Butter

[ Choose ] 2 4 1 5 3

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