Solution-Rank the salsas on the basis of expected revenue

Rank the salsas on the basis of expected revenue

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Reference no: EM132867058

Problem - Robinson's Grocery Store is a small corner grocery store in rural Montana, and shelf space is very limited. Management must decide how to allocate shelf space for salsa. Robinson's has been given an opportunity to sell a very popular brand of salsa produced by Bobby Tutor, a popular rock star. The unique bottle is taller and thinner than bottles from the other popular brands on the market, increasing its visibility on the shelf. Following are sales and cost data on the new salsa and the three other brands presently sold by Robinson's:

	Salsa #1	Salsa #2	Salsa #3	New Salsa
Sales price per jar (Rs.)	125	137.50	150	200
Cost to purchase (Rs.)	62.50	67.50	75	160
Contribution margin (Rs.)	62.50	70	75	40
Bottles per foot of shelf space	10	9	7	12

Required -

A. Rank the salsas on the basis of expected revenue if each is given 10 feet of shelf space and all bottles are expected to be sold.

B. On the basis of the information given, which salsa should get the most shelf space? Why?

C. What qualitative factors should be considered in this decision? How would these factors affect the decision?

Reference no: EM132867058

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Rank the salsas on the basis of expected revenue

Reference no: EM132867058

Reference no: EM132867058

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