The Food Max grocery store sells three brands of milk in half-gallon cartonsits own brand, a local dairy brand, and a national brand. The profit fromits own brand is $0.97 per carton, the profit from the local dairy brand is $0.83 per carton, and the profit from the national brand is $0.69 per carton.The total refrigerated shelf space allotted to half-gallon cartons of milk is 36 square feet per week. A half-gallon carton takes up 16 square inchesof shelf space. The store manager knows that each week Food Max always sells more of the national brand than of the local dairy brand and itsown brand combined and at least three times as much of the national brand as its own brand. In addition, the local dairy can supply only 10 dozencartons per week. The store manager wants to know how many half-gallon cartons of each brand to stock each week in order to maximize profit.If Food Max could increase its shelf space for half-gallon cartons of milk, how much would profit increase per carton?

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
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The Food Max grocery store sells three brands of milk in half-gallon cartonsits own brand, a local dairy brand, and a national brand. The profit from
its own brand is $0.97 per carton, the profit from the local dairy brand is $0.83 per carton, and the profit from the national brand is $0.69 per carton.
The total refrigerated shelf space allotted to half-gallon cartons of milk is 36 square feet per week. A half-gallon carton takes up 16 square inches
of shelf space. The store manager knows that each week Food Max always sells more of the national brand than of the local dairy brand and its
own brand combined and at least three times as much of the national brand as its own brand. In addition, the local dairy can supply only 10 dozen
cartons per week. The store manager wants to know how many half-gallon cartons of each brand to stock each week in order to maximize profit.
If Food Max could increase its shelf space for half-gallon cartons of milk, how much would profit increase per carton?

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