(L.OBJ. 3) Making dropping a product and product-mix decisions [15—20 min] Each morning...

(L.OBJ. 3) Making dropping a product and product-mix decisions [15—20 min]

Each morning, Mike Smith stocks the drink case at Mike’s Beach Hut in Myrtle Beach, South Carolina. Mike’s Beach Hut has 100 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.

Mike’s Beach Hut can sell all the drinks stocked in the display case each morning.

Requirements

1. What is Mike’s Beach Hut’s constraining factor? What should Mike stock to maximize profits?

2. Suppose Mike’s Beach Hut refuses to devote more than 65 linear feet to any individual product. Under this condition, how many linear feet of each drink should Mike’s stock? How many units of each product will be available for sale each day?