Easy Time Store (profit/case) Purchase Location 1 2 3 4 Supply $ 9 $ 8 $1 $12 $7 $ 8 Albany Binghamton 26 10 10 8. 9. 7 40 Claremont 7 4 20 Dover 4 6. 9. 8. 10 40 Edison 12 10 8. 9. 6. 7 45 Demand 25 15 30 18 27 35 %24
The Easy Time Grocery chain operates in major metropolitan areas on the East Coast. The stores
have a “no-frills” approach, with low overhead and high volume. They generally buy their stock
in volume at low prices. However, in some cases they actually buy stock at stores in other areas
and ship it in. They can do this because of high prices in the cities they operate in compared with
costs in other locations. One example is baby food. Easy Time purchases baby food at stores in
Albany, Binghamton, Claremont, Dover, and Edison and then trucks it to six stores in and
around New York City. The stores in the outlying areas know what Easy Time is up to, so they
limit the number of cases of baby food Easy Time can purchase. The following table shows the
profit Easy Time makes per case of baby food, based on where the chain purchases it and at which store it is sold, plus the available baby food per week at purchase locations and the shelf
space available at each Easy Time store per week: Determine where Easy Time should purchase baby food and how the food should be distributed
to maximize profit.
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