Maximizing Revenue in the Candy Business

Maximizing Revenue Strategy

To maximize revenue in the candy business, it is essential to optimize the production of Slugger and Easy Out candies based on the available ingredients and market demand. In this scenario, the candy maker has 10,000 ounces of sugar, 3,000 ounces of nuts, and 3,000 ounces of chocolate in stock. To determine the best combination of candies to produce, we need to consider the ingredient requirements and pricing.

Calculating the Maximum Revenue

First, we need to calculate the maximum quantity of each type of candy that can be produced:

  • Slugger Candy: Must contain at least 10% nuts and 10% chocolate. The maximum quantity of nuts available is 3,000 ounces. Therefore, the maximum quantity of Slugger candy that can be produced is 3,000 ounces x 100% / 20% = 15,000 ounces.
  • Easy Out Candy: Must contain at least 20% nuts. The maximum quantity of nuts available is 3,000 ounces. Therefore, the maximum quantity of Easy Out candy that can be produced is 3,000 ounces x 100% / 20% = 15,000 ounces.

Optimizing Candy Production

Based on the calculations, to maximize revenue, the candy maker should produce 15,000 ounces of Easy Out candies and 15,000 ounces of Slugger candies. This combination uses all the available ingredients efficiently:

  • Revenue from Easy Out candies = 15,000 ounces x $0.60/ounce = $9,000
  • Revenue from Slugger candies = 15,000 ounces x $0.40/ounce = $6,000

Final Revenue Calculation

The total revenue is the sum of revenue from Easy Out and Slugger candies:

Total Revenue = $9,000 (Easy Out) + $6,000 (Slugger) = $15,000

Therefore, by producing 15,000 ounces of each type of candy, the candy maker can maximize revenue and earn a total of $15,000. This strategy ensures that all ingredients are utilized effectively and the candies are priced competitively in the market.

← Compound interest calculation chen s rrsp deposit account How to buy a franchise and start your entrepreneurial journey →

More Posts: