Find the optimal batch size

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Reference no: EM132142517

Suppose the weekly demand for a soft drink syrup is exponentially distributed with mean 150 gallons. The syrup is produced in batches; one batch of syrup is made each week. If not used within the week following production, the syrup spoils. The syrup costs $3/gallon to produce and any unused syrup must be disposed of at the end of the week at a cost of $0.50/gallon. A gallon of syrup yields $4.50 in sales. Find the optimal batch size.

Reference no: EM132142517

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