(L.ORJ. 3) Making dropping a product and product-mix decisions [15 min] Consider Store-...

(L.ORJ. 3) Making dropping a product and product-mix decisions [15 min]

Consider Store-It in Short Exercise 19-6. Assume demand for regular bins is limited to 32,000 units and demand for large bins is limited to 27,000 units.

Requirements

1. How many of each size bin should Store-It make now?

2. Given this product mix, what will the company’s operating income be?

3. Explain why the operating income is less than it was when Store-It was producing its optimal product mix in 19-6.