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Each$$ morning, Mike Imery stocks the drink case at Mike$\text{'}$s Beach Hut in Grand Isle comma Louisiana. Mike$\text{'}$s Beach Hut has $120$ 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.

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The beverage stand can sell all drinks stocked in the display case each morning.

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Part $1$

Requirement $1.$ What is the constraining factor at Mike$\text{'}$s Beach$$ Hut? What should Mike stock to maximize$$ profits? What is the maximum contribution margin he could generate from refrigerated drinks each$$ day?

The constraining factor is

linear feet of shelf space

$.$ Mike$\text{'}$s should stock the drink with the

highest

contribution margin.

Part $2$

Complete the product mix analysis to determine which product would maximize Mike$\text{'}$s profits.

Mike's Beach Hut

Product Mix Analysis

just$-$cola

bottled water

orange soda

$12$ oz$.$ Cans

$20$ oz$.$ Bottles

$20$ oz$.$ Bottles

Sales price per unit

$$1\mathrm{.}60$

$$1\mathrm{.}75$

$$2\mathrm{.}10$

Variable cost per unit

$0\mathrm{.}10$

$0\mathrm{.}40$

$0\mathrm{.}70$

Contribution margin per unit

$1\mathrm{.}50$

$1\mathrm{.}35$

$1\mathrm{.}40$

Units per linear foot of shelf space

$\backslash$times

$5$

$\backslash$times

$4$

$\backslash$times

$4$

Contribution margin per linear foot of shelf space

$$7\mathrm{.}50$

$$5\mathrm{.}40$

$$5\mathrm{.}60$

Part $3$

Just$-$Cola $12-$oz$.$ cans

has the highest contribution margin per linear foot of shelf space. To maximize$$ profits, Mike$\text{'}$s should devote all its shelf space to

just$-$cola $12-$oz$.$ cans

$.$

Part $4$

$($Round your answer to the nearest whole$$ dollar.$)$

The maximum contribution margin that Mike could generate each day from refrigerated drinks is

$.$

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