The Operations Manager for the Blue Moon Brewing Co

question 55

Multiple Choice

The operations manager for the Blue Moon Brewing Co. produces two beers: Lite (L) and Dark (D) . Two of his resources are constrained: production time, which is limited to 8 hours (480 minutes) per day; and malt extract (one of his ingredients) , of which he can get only 675 gallons each day. To produce a keg of Lite beer requires 2 minutes of time and 5 gallons of malt extract, while each keg of Dark beer needs 4 minutes of time and 3 gallons of malt extract. Profits for Lite beer are $3.00 per keg, and profits for Dark beer are $2.00 per keg.
Which of the following is not a feasible production combination?

• A)0 L and 0 D
• B)0 L and 120 D
• C)90 L and 75 D
• D)135 L and 0 D
• E)135 L and 120 D

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Definitions:

Innovative Products

Products that introduce new features, functionalities, or technologies to meet emerging consumer needs or to open new markets.

Oligopolistic Competition

A market structure in which a few firms dominate, each with a significant share of the market, leading to limited competition and high barriers to entry.

Price Wars

A competitive strategy where companies reduce prices of goods or services in succession to undercut competitors, with potential negative effects on industry profits.

Penetration Pricing Strategy

A pricing tactic in which a product is offered at a low price during its initial offering to attract customers and gain market share.