Tuck shop at the prize-giving
A BGCSE business club is running a tuck shop at prize-giving. They have P600 capital and can store at most 200 items. The supplier sells water at P2.00 per bottle (minimum order 24), chips at P3.00 per packet (minimum 20), and chocolate at P5.00 per bar (minimum 10). They expect about 120 customers, each wanting one drink and one snack. The club plans to buy 80 waters, 80 packets of chips and 40 chocolate bars. They intend to sell water at P4, chips at P5 and chocolate at P8. The school requires the club to make at least P350 profit and not to run out of water before the last 20 customers. A teacher warns that chocolate may sell slowly because it is a hot day.
1. Test whether the planned order fits the P600 budget and the 200-item storage limit. Show your working and state the total cost, total items and remaining money.
Read the worked answer
Water: 80 × P2 = P160.
Chips: 80 × P3 = P240.
Chocolate: 40 × P5 = P200.
Total cost = P160 + P240 + P200 = P600.
Total items = 80 + 80 + 40 = 200.
The order uses the whole budget and exactly fills the storage limit, so it is financially and physically feasible. The minimum order sizes are also met. However, there is no cash buffer for emergencies or unsold stock, and the plan has no spare storage. A small mistake in counting or a supplier price change would break the plan.
2. The club sells 90% of each item. Calculate the revenue and profit. Does the club meet the P350 profit target? Show your reasoning.
Read the worked answer
90% of each item:
- Water sold: 0.9 × 80 = 72 bottles. Revenue = 72 × P4 = P288.
- Chips sold: 0.9 × 80 = 72 packets. Revenue = 72 × P5 = P360.
- Chocolate sold: 0.9 × 40 = 36 bars. Revenue = 36 × P8 = P288.
Total revenue = P288 + P360 + P288 = P936.
Profit = revenue − cost = P936 − P600 = P336.
The club misses the P350 target by P14. The shortfall is small, but the teacher’s warning matters: if chocolate sells less than 90%, profit falls further. For example, selling only 25 chocolate bars gives revenue P200 instead of P288, reducing profit to P248. The club should not treat the target as secure.
3. Explain why the plan cannot satisfy 120 customers who each want one drink and one snack, and recommend a practical adjustment. Support your answer with numbers.
Read the worked answer
The plan buys only 80 drinks for about 120 customers. Even if every bottle sells, 40 customers cannot buy a drink. Also, 120 customers wanting one drink and one snack need 120 + 120 = 240 items, which is above the 200-item storage limit.
A possible order of 120 waters and 80 chips gives 200 items and costs (120 × P2) + (80 × P3) = P240 + P240 = P480. This serves 120 drinks but only 80 snacks, so 40 customers still lack a snack. A full 120-drink and 120-snack order would be 240 items and cost at least P240 + P360 = P600 for water and chips alone, before chocolate, so storage is the binding constraint.
Practical adjustment: pre-sell 80 combo tickets so demand is known, then order 80 waters and 80 snacks, or ask the school for extra storage and buy 120 of each. Pre-selling reduces waste and protects profit.