The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.78 cents per sandwich. Sandwiches sell for $2.43 each in all locations. Rent and equipment costs would be $5,000 per month for location A, $6,500 per month for location B, and $5,800 per month for location C. a. Determine the volume necessary at each location to realize a monthly profit of $10,000. b. If expected sales at A, B, and C are 22,000 per month, 21,000 per month, and 20,000 per month, respectively, which location would yield the greatest profits?
The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet. She has studied three locations. Each would have the same labor and materials costs (food, serving containers, napkins, etc.) of $1.78 cents per sandwich. Sandwiches sell for $2.43 each in all locations. Rent and equipment costs would be $5,000 per month for location A, $6,500 per month for location B, and $5,800 per month for location C. a. Determine the volume necessary at each location to realize a monthly profit of $10,000. b. If expected sales at A, B, and C are 22,000 per month, 21,000 per month, and 20,000 per month, respectively, which location would yield the greatest profits?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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The owner of Genuine Subs, Inc., hopes to expand the present operation by adding one new outlet.
She has studied three locations. Each would have the same labor and materials costs (food, serving
containers, napkins, etc.) of $1.78 cents per sandwich. Sandwiches sell for $2.43 each in all locations.
Rent and equipment costs would be $5,000 per month for location A, $6,500 per month for
location B, and $5,800 per month for location C.
a. Determine the volume necessary at each location to realize a monthly profit of $10,000.
b. If expected sales at A, B, and C are 22,000 per month, 21,000 per month, and 20,000 per month,
respectively, which location would yield the greatest profits?
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