The opportunity cost of capital to I-Scream is estimated

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Daily demand for the ice creams at I-Scream parlor is normally distributed with a mean of 100 quarts and a standard deviation of 40 quarts. The owner has the ice cream supplied by a wholesaler who charges $2 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 25% per year. Assume 360 days in the year.

Reference no: EM13966883

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