Chapter 2 Project: Hot! Hot! Hot!
Alexis WHitaker. March 11. Kirkland.
I am the owner of the Sizzlin’ Sauce Company. My company makes two different kinds of sauce, Red Hot Sauce (x) and Scorchin’ Hot Sauce (y). As the owner of a successful business, I want to minimize the cost and maximize the profit. Also I want to keep customers satisfied by filling orders in a timely fashion.
You should use 150 pints of Red Hot Sauce and 75 pints of Scorchin' Hot Sauce. Your maximum profit would be $255.00.
The price of 1 pint of Red Hot Sauce would be $7.05 and the price of 1 pint of Scorchin' Hot Sauce would be $8.48. The selling price should be Red Hot Sauce for $8.25 and Scorchin' Hot Sauce for $9.48.
If you can sell your sauce to a supermarket chain, a local grocery, and a specialty store. !e supermarket chain will buy 288 pt every 8 weeks, the grocery will buy 60 pt every 4 weeks, and the speciality store will buy 24 pt each week.
You should produce 75 pints of sauce each week to be able to fill these orders.
The profit analysis is that you're making 75 pints of each sauce each week. A pint of Scorchin' Hot Sauce costs $8.48 to make and Red Hot Sauce costs $7.05 to make. You sell Scorchin' Hot Sauce for $9.48 and you sell Red Hot Sauce for $8.25. This brings you to a maximum profit of $255.00.
Shipping & Expenses:
$150.00 a month for utilities.
$80.00 a month for production facility.
$70.00 per week per worker.
$20.00 per week for diesel fuel.