Each morning, Ned Root stocks the drink case at Ned\'s Beach Hut in Myrtle Beach

Question

Each morning, Ned Root stocks the drink case at Ned's Beach Hut in Myrtle Beach, South Carolina. The drink case has 120 linear feet of refrigerated drink space. Each linear foot can hold either six 12-ounce cans or three 20-ounce bottles. EE (Click the icon to view the information on the cold drinks.) Ned's Beach Hut can sell all the drinks stocked in the display case each morning. Read the requirements Data Table Just-Soda Ned's Beach Hut sells three types of cold drinks: 1. Just- Soda in 12-oz. cans for $1.60 per can 2. Just Soda in 20-oz. bottles for $2.00 per bottle 3. Best Cola in 20-oz. bottles for $2.35 per bottle 12 oz. Cans 20 oz. Bottles 20 oz. Bottles Sales price per unit Variable cost per unit Ned's Beach Hut pays its suppliers: 1. S0.40 per 12-oz. can of Just Soda 2. S0.60 per 20-oz. bottle of Just Soda 3. S0.90 per 20-oz. bottle of Best -Cola margin per unit Units per linear foot of shelf space margin per linear foot of shelf space Ned's Beach Hut's monthly fixed costs include: Hut rental Refrigerator rental Ned's salary Total fixed costs 350 70 1,650 S 2,070 Decision: Stock Requirement 2. Suppose Ned's Beach Hut refuses to devote mcre than 75 linear feet to any individual product. Under this condition, how many linear feet e for sale each day? (Abbreviation used: CM-contribution margin.) Ned's Beach Hut should stock its shelves as follows: First stocklnear foot with tho product that has theC CM per linear foot PrintDone linear feet with the product that has the How many units of each product will be available for sale each day based on the product mixed determined in the preceding step? (For entries with a $0 Units for sale Requirements Just-Soda in 12 oz. cans: Just-Soda in 20 oz. bottles: Best-Cola in 20 oz. bottles cans bottles bottles 1. What is Ned's Beach Hut's constraining factor? What should Ned stock to maximize profits? 2. Suppose Ned's Beach Hut refuses to devote more than 75 linear feet to any individual product. Under this condition, how many linear feet of each drink should Ned's stock? How many units of each product will be available for sale each day? Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later

Explanation / Answer

Just Soda Just Soda Best Cola 12 oz cans 20oz bottles 20oz bottles Sales rice Per Unit 1.6 2 2.35 Variable Cost per Unit 0.4 0.6 0.9 Contribution Margin per unit 1.2 1.4 1.45 Unit per linear Foot of Shelf Space 6 3 3 Contribution margin per linear foot of shelf space 7.2 4.2 4.35 Requirement - 1 Decision Stock Just Soda 12 OZ Cans Requirement - 2 First Stock …..75 Linear Feet with the product that has the 7.2 CM per Linear Feet 540 7.2*75 Just Soda 12 Oz Cans Next Stock …..45 Linear Feet with the product that has the 4.35 CM per Linear Feet 195.75 4.35*(120-75) Best Cola 20 Oz Bottles Just Cola in 12 Oz Cans ( 75*6) 450 Cans Just Cola in 20oz bottles ( 45*3) 135 Bottles Best Cola in 20oz Bottles (0) 0 Bottles

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