Wheatie should be allocated 35 more space than grano which, Ask an Expert

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In the Ma-and-Pa grocery store, shelf space is limited and must be used effectively to increase profit. Two cereal items, Grano and Wheatie. compete for a total shelf space of 60 ft2. A box of Grano occupies .2 ft2 and a box of Wheatie needs .4 ft2. The maximum daily demands of Grano and Wheatie are 200 and 120 boxes, respectively. A box of Grano nets $1.00 in profit and a box of Wheatie $135. Ma-and-Pa thinks that because the unit profit of Wheatie is 35% higher than that of Grano. Wheatie should be allocated 35% more space than Grano, which amounts to allocating about 57% to Wheatie and 43% to Grano. What do you think?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M990677

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