4 Starbright Coffee Shop At The Galleria Mall Serves Two Coffee Blends It Brews On A Daily Basis Pomona And Coastal E 1 (24.34 KiB) Viewed 140 times
4. Starbright Coffee Shop at the Galleria Mall serves two coffee blends it brews on a daily basis, Pomona and Coastal. Each is a blend of three high-quality coffees from Colombia, Kenya, and Indonesia. The coffee shop has 6 pounds of each of these coffees available each day. Each pound of coffee will produce sixteen 16-ounce cups of coffee. The shop has enough brewing capacity to collectively brew 30 gallons of these two coffee blends each day. Pomona is a blend Iof 20% Colombian, 35% Kenyan, and 45% Indonesian, whereas Coastal is a blend of
60% Colombian, 10% Kenyan, and 30% Indonesian. The shop sells at least 1.5 times more Pomona than Coastal each day. Pomona sells for $2.05 per cup, and Coastal sells for $1.85 per cup. The manager wants to know how many cups of each blend to sell each day to maximize sales revenue.
(a) If Starbright Coffee Shop could get 1 more pound of coffee, which one should it be? What would be the effect on sales of getting 1 more pound of this coffee? (b) If the costs associated with increasing brewing capacity from 30 gallons to 40 gallons per day come out to roughly $15 per day, would such a change be profitable? (c) If the shop spent $20 per day on advertising that would increase the relative demand for Pomona to twice that of Coastal, should it be done?
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