Daily Demand for the Ice Creams at I-Scream Parlor Is

Multiple Choice

Daily demand for the ice creams at I-Scream parlor is normally distributed with a mean of 160 quarts and a standard deviation of 100 quarts. The owner has the ice cream supplied by a wholesaler who charges $2 per quart. The wholesaler charges a $400 delivery charge independent of order size. It takes 4 days for an order to be supplied. The opportunity cost of capital to I-Scream is estimated to be 25% per year. Assume 360 days in the year. [Show all work]
-The owner would like to ensure no stock-outs in 95% of the cycles. The optimal safety stock the store should have is:

A) 660 quarts
B) 528 quarts
C) 330 quarts
D) 264 quarts
E) 165 quarts