QUESTION 16 Joe must decide how much ice-cream to stock in his ice-cream truck that he drives around Grand Blanc, MI. Ice cream sells for $7 per lb (pound) and costs $3 per lb. At the end of the day any unsold ice-cream must be discarded as it has melted Daily demand can be approximated by a normal distribution with a mean of 98 lbs and standard deviation of 20 lbs. What is the optimal stocking level? (Round your answer to 2 decimal places)
Expert Answer
Cost of shortage (Cs) = Selling price – Cost price = 7-3 =
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