What is the optimal processing capacity that webflix will


For next year, WebFlix projects that demand at its processing facility is normally distributed with mean 3,600 DVDS per day and standard deviation of 60. WebFlix needs to set a capacity for this facility, which is measured in DVDs per day. If the capacity is Q, then the cost per day incurred for this capacity is $0.1Q, no matter whether the capacity is fully utilized or not. If demand on a day exceeds the chosen capacity, then WebFlix processes the entire excess using overtime. In that case, each DVD handled with overtime costs $0.15 to process. What is the optimal processing capacity that WebFlix will need?

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