Question: Question 6:

Daily demand for ice cream at the I-Scream parlor has a mean of 400 quarts per day. The owner has the ice cream supplied by a wholesaler who charges $8 per quart. The wholesaler charges a $90 delivery charge independent of order size. The opportunity cost of capital to I-Scream is estimated to be 20% per year, and the additional storage cost of keeping the ice cream frozen and in stock is another 5% per year. Assume 360 days in a year. What is the optimal order size for quarts of ice cream?