Hot! Hot! Hot!
Created by: Alexis Barrett
Suppose you are the owner of the Sizzlin' Sauce Company. Your company makes two different kinds of sauce, Red Hot Sauce and Scorchin' Hot Sauce.
If you were to graph these inequalities to get a better look of what your income is, this is what it would look like...
As the owner of a small but yet successful business, you want to minimize costs, maximize profit, and keep customers satisfied by filling orders promptly. Looking at the graph above you can see the 4 vertices where the two lines intersect, at each other and on the axes as well. This is where you can calculate your maximum profit supposing you make $1.00/pt profit on Scrochin' Hot Sauce and $1.20/pt profit on Red Hot Sauce.
With these calculations it would be best to use 75 pints of of Scrochin' Hot Sauce and 150 pints of Red Hot Sauce for the most profit of $255.00.
When you visit a local grocery store, for example Walmart, the prices for your ingredients will be:
In total 1 pint of Scrochin' Hot Sauce will be $9.26 and 1 pint of Red Hot Sauce will be $7.83. You should sell the Scrochin' Hot Sauce for $10.26 per pint and the Red Hot Sauce for $9.03 per pint.
You can sell your sauce to a supermarket chain, a local grocery, and a specialty store. The supermarket chain will buy 288 pints every 8 weeks, the grocery store will buy 60 pints every 4 weeks, and he specialty store will buy 24 pints every week. To fill these orders you should make 75 pints of sauce each week.
The profit analysis of producing Sizzlin' Sauce is that your making 75 pints of sauce a week. A pint of Scrochin' Hot Sauce costs $9.26 to make. A pint of Red Hot Sauce costs $7.83 to make. You sell Scrochin' Hot Sauce for $$10.26 and you sell Red Hot Sauce $9.03. This brings in the maximum profit of approximately $255.00.
Other expenses may be $80.00 for production facility, $40.00 a week for diesel fuel, $135.00 for utilities, and workers paid $95.00 a week.