The "Happy Cow" store sells skim milk that is delivered daily. The demand has a uniform distribution between 200 and 350 liters. The store buys milk for $ 1 a liter and sells it for $ 2.10 a liter. At the end of the day, the remaining nilk is sold to a chemical company for $ 0.25 a liter. If shortages occur customers will purchase milk from the competition at an additional cost, in addition to the lost profit of $ 0.5 per liter. It is requested: 1) What would be the optimal amount of milk to order? 5) What would be the expected number of liters of milk not sold? =) What would be the expected number of shortage liters?

The "Happy Cow" store sells skim milk that is delivered daily. The demand has a uniform distribution between 200 and 350 liters. The store buys milk for $ 1 a liter and sells it for $ 2.10 a liter. At the end of the day, the remaining nilk is sold to a chemical company for $ 0.25 a liter. If shortages occur customers will purchase milk from the competition at an additional cost, in addition to the lost profit of $ 0.5 per liter. It is requested: 1) What would be the optimal amount of milk to order? 5) What would be the expected number of liters of milk not sold? =) What would be the expected number of shortage liters?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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