Common Scents, Inc., makes various scents for use in the manufacture of food products. Although the.

Common Scents, Inc., makes various scents for use
in the manufacture of food products. Although the company does maintain a
safety stock, it has a policy of maintaining lean inventories, with the
result that customers sometimes must be turned away. In an analysis of the
situation, the company has estimated the cost of being out of stock associated
with various levels of safety stock:

Carrying costs are $0.65 per gallon per year. What
is the best level of

Common Scents, Inc., makes various scents for use
in the manufacture of food products. Although the company does maintain a
safety stock, it has a policy of maintaining lean inventories, with the
result that customers sometimes must be turned away. In an analysis of the
situation, the company has estimated the cost of being out of stock associated
with various levels of safety stock:

Carrying costs are $0.65 per gallon per year. What
is the best level of safety stock for the company?

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