The Production Planner for a Private Label Soft Drink Maker

question 34

Multiple Choice

The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S) .Two resources are constrained: production time (T) ,of which she has at most 12 hours per day; and carbonated water (W) ,of which she can get at most 1500 gallons per day.A case of root beer requires 2 minutes of time and 5 gallons of water to produce,while a case of sassafras soda requires 3 minutes of time and 5 gallons of water.Profits for the root beer are $6.00 per case,and profits for the sassafras soda are $4.00 per case.For the production combination of 180 Root beer and 0 Sassafras sodas,which resource is "slack" (not fully used) ?

• A)Production time (only)
• B)Carbonated water (only)
• C)Both production time and carbonated water
• D)Neither production time nor carbonated water
• E)Cannot be determined exactly

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Definitions:

Scheduled Debt

A fixed plan for the repayment of borrowed money, including principal and interest, over a specified period.

Compounded Quarterly

Interest calculation method where the interest is added to the principal four times a year, leading to more interest earned or paid than if it were compounded less frequently.

Interest

A financial expense for accessing borrowed capital, customarily indicated by an annual rate in percentage.

Investment

The act of allocating funds into ventures with the intention of gaining financial returns or tangible outcomes.