A grocery store manager must decide how to best present a limited supply of milk and cookies to its customers. Milk can be sold by itself for a profit of $1.50 per gallon. Cookies can likewise be sold at a profit of $2.50 per dozen. To increase appeal to customers, one gallon of milk and a dozen cookies can be packaged together and are then sold for a profit of $3.00 per bundle. The manager has 100 gallons of milk and 150 dozen cookies available each day. The manager has decided to stock at least 75 gallons of milk per day and demand for cookies is always 140 dozen per day. To maximize profits, how much of each product should the manager stock.
The manager's problem falls within which classification?
A) Resource-allocation
B) Cost-benefit-trade-off
C) Mixed problems
D) Transportation problems
E) Assignment problems

Question

Quizplus · Accepted Answer

This problem involves a mix of maximizing profits while also satisfying constraints related to stock levels and demand. Therefore, it falls under the classification of mixed problems. The optimal solution involves stocking 75 gallons of milk and 140 dozen cookies, and then bundling the remaining 25 gallons of milk with 10 dozen cookies to maximize profit.

A Grocery Store Manager Must Decide How to Best Present