Each morning Heidi Cooper stocks the ice cream fridge at Heidi's Cool Treats in Minden. The ice cart has refrigerated display space for 45, 10 litre ice cream tubs. The cart sells hand scooped ice cream, frozen yogurt and gelato. The accounting records reveal the following:

Heidi's Cool Treats incurs monthly fixed costs of $2,000.
Each day all the product in the cart can be sold.
Required:
1. What is Heidi's Cool Treats' constraining factor? What should Heidi stock to maximize profits? What is the maximum contribution margin she could generate each day?
2. To provide variety to customers, suppose Heidi refuses to devote more than 20 tubs and no fewer than 10 tubs to any individual product. Under this condition, how many tubs of each product should Heidi stock? How many units of each product will be available for sale each day?
3. Assuming the product mix calculated in Requirement 2, what contribution margin will Heidi's Cool Treats generate each day?

Question

Each morning Heidi Cooper stocks the ice cream fridge at Heidi's Cool Treats in Minden. The ice cart has refrigerated display space for 45, 10 litre ice cream tubs. The cart sells hand scooped ice cream, frozen yogurt and gelato. The accounting records reveal the following:
  
Heidi's Cool Treats incurs monthly fixed costs of $2,000.
Each day all the product in the cart can be sold.
Required:
1. What is Heidi's Cool Treats' constraining factor? What should Heidi stock to maximize profits? What is the maximum contribution margin she could generate each day?
2. To provide variety to customers, suppose Heidi refuses to devote more than 20 tubs and no fewer than 10 tubs to any individual product. Under this condition, how many tubs of each product should Heidi stock? How many units of each product will be available for sale each day?
3. Assuming the product mix calculated in Requirement 2, what contribution margin will Heidi's Cool Treats generate each day?

Quizplus · Accepted Answer

The Answer of Each morning Heidi Cooper stocks the ice cream fridge at Heidi's Cool Treats in Minden. The ice cart has refrigerated display space for 45, 10 litre ice cream tubs. The cart sells hand scooped ice cream, frozen yogurt and gelato. The accounting records reveal the following:
  
Heidi's Cool Treats incurs monthly fixed costs of $2,000.
Each day all the product in the cart can be sold.
Required:
1. What is Heidi's Cool Treats' constraining factor? What should Heidi stock to maximize profits? What is the maximum contribution margin she could generate each day?
2. To provide variety to customers, suppose Heidi refuses to devote more than 20 tubs and no fewer than 10 tubs to any individual product. Under this condition, how many tubs of each product should Heidi stock? How many units of each product will be available for sale each day?
3. Assuming the product mix calculated in Requirement 2, what contribution margin will Heidi's Cool Treats generate each day?

Each Morning Heidi Cooper Stocks the Ice Cream Fridge at Heidi's