How many waffle cones should purchase each day


Response to the following problem:

Johansen's Ice Cream Shoppe purchases fresh-baked waffle cones from the Myra Cone Company. The cones cost Johansen $0.28 each and are delivered once each day. Johansen's charges customers who want their ice cream in a waffle cone an extra $0.40. If Johansen's runs out of waffle cones, it estimates that it suffers a customer goodwill loss of $0.75 for each additional customer request for a waffle cone. Unsold waffle cones are ground up and used as toppings on the frozen yogurt sold by the company. Johansen's therefore estimates the salvage value of unsold cones at $.06. Johansen's also estimates that daily demand for the waffle cones follows approximately a normal distribution with a mean of 70 units and a standard deviation of 16 units.

Determine how many waffle cones Johansen's should purchase each day from Myra Cone.

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Cost Accounting: How many waffle cones should purchase each day
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