Ecker, Inc. produces milk at a total cost of $66,000. The production generates 60,000 gallons of milk which can be sold for $1 per gallon to a pasteurization company, or the milk can be processed further into ice cream and then sold for $3 per gallon. It costs $75,000 more to turn the annual milk supply into ice cream. Required:
If Ecker processes the milk into ice cream, how much is the incremental profit or loss? Should Ecker process the milk into ice cream or sell it as is?

Jimmy's delicatessen sells large tins of tom tucker's toffee. the deli uses a periodic review system, checking inventory levels every 88 days, at which time an order is placed for more tins. order lead time is 22 days. daily demand is a constant 1515 tins, so average demand during the reorder period and order lead time (1010 days) is 150150 tins. draw a sawtooth diagram. assume that the beginning inventory level is equal to the restocking level and the desired service level is 99.9%. what is the safety stock level? (hint: look at the formula for calculating restocking level.) what is the average inventory level? the safety stock level is average inventory level is __chart: time (10,20,30), tins (0,150) lines touching both axisthe safety stock level is 0 tinsthe average inventory level is 75 tins