Each moming. Nick Ivery stocks the drink case at Nick\'s Beach Hut in Myle Beach

Question

Each moming. Nick Ivery stocks the drink case at Nick's Beach Hut in Myle Beach, South Caroina The drink case has 105 inear feet of nefrigerated drink space Each linear foot can hold eth seven 12-ounce cans or three 20-ounce bottes (Cick te icon to view the infrmabon on the cold dinks) Nick's Beach Hut can sell all the drinks stocked in the display case each moming Read the moments Data Table Requirement 1. What is Nick's Beach Huf's constraining fector? Whatl should Nick stock to maximize profs? The constraining factor is What should Nick stock to maximize profits? Compiete the product mix analysis to debermine which product would maximize Nick's profts 3. Energy-Ade in 20-oz botties for $2.15 per bote Nok's Beach pays ts suppiert $0.20 per 12-o can of Licious-Ade 2. $0.45 per 20-az bottle of Licious Ade a so.80 per 20-or botte of Energy-Ade Nick's Beach Hut's monthly flwed costs indlude 12 oz Cans 20 oz. Bottles 20 oz Botties Sales price per unit ariable cost per unit Contribution margin per unt Units per linear foot of shellf space Hut ental margin per linear foot of S 1,950 Total fed Decision: Stock Print Done Choose from any Ist or enter any number in the rout fields and then connue to the rer 3 5 6

Explanation / Answer

Since contribution margin per linear foot of shelf space is the highest in case of Energy-Ade 20 oz. bottles, it is preferrable to stock Energy-Ade 20 oz. bottles to maximise profits.

Decision: Stock Energy-Ade 20 oz. bottles.

Requirement 1: The Constraining factor Refrigerated Drink space Calculation of Contribution margin per constraining factor: Licious-Ade Energy-Ade 12 oz. Cans 20 oz. Bottles 20 oz. Bottles Sales Price per unit 1.45 1.75 2.15 Variable Cost per unit 0.2 0.45 0.8 Contribution margin per unit 1.25 1.30 1.35 Units per linear foot of shelf space 7 3 3 Contribution margin per linear foot of shelf space 0.18 0.43 0.45 Ranking 3 2 1

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