4 store 24 should stock the flavored water because it

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4. Store 24 should stock the flavored water because it yields the maximum contribution margin per square foot of shelf space –– $13.50 versus $6.992 for plain water and $8.40 for sparkling water. 5. Despite its high contribution margin per square foot, Store 24 cannot only offer the flavored water because customers have varying tastes and will expect a variety of water options. By offering a single product, Store 24 could potentially turn away customers seeking the unavailable products, resulting in lost revenue for Store 24. Thus Store 24 should stock all three waters –– flavored, plain, and sparkling. The exact amount of shelf space devoted to each product will depend on Store 24’s expectations a bout consumer demand for each product and the contribution margin per square foot of shelf space for each product.

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