How much milk should be purchased


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Q: Supermarket sells, 2% milk, which is delivered daily. The daily demand is uniformly distributed between 100 and 200 gallons. The milk costs the store $1 and sells for $2.1. at the end of the day unsold milk is sold to a chemical company for $0.25 per gallon. If a shortage occurs customers will buy skim milk instead. Profit on skim is $0.50 per gallon. How much milk should be purchased?

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Operation Management: How much milk should be purchased
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