Question: Goop Inc. needs a polymer, as a raw material, that has an average demand of 250 gallons and std deviation of 100 gallons. Goop sells
Goop Inc. needs a polymer, as a raw material, that has an average demand of 250 gallons and std deviation of 100 gallons. Goop sells the polymer for $25 a gallon. It purchases the raw material at $10 per gallon. Leftover inventory must be disposed of, due to government regulations. Disposal will cost $5 per gallon. How many gallons should Goop purchase to minimize its mismatch cost?
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