Question: 4 5 . If Food Max in Problem 4 4 could increase its shelf space for half - gallon cartons of milk, how much would

45. If Food Max in Problem 44 could increase its shelf space for half-gallon cartons of milk, how much would profit increase per carton? If Food Max could get the local dairy to increase the amount of milk it could supply each week, would it increase profit? It would not increase profit. As the store manager describes, he knows that each week Food Max always sells more of the national brand than of the local dairy brand and its own brand combined. With the constraints tested through a computer and considering it hypothetically, Increasing the amount of milk the local dairy supplies does not mean that demand, sales, and profit for it would increase as well. Food Max is considering discontinuing its own brand to increase sales. If it were to do so, it would decrease the profit margin for its own brand to $0.86 per carton, but it would cut the demand for the national brand relative to its own brand in half. Discuss whether the store should implement the price discount.

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