The selling price that a gallon of milk sells is $5.77 for the given milk store.
<h3>What is demand?</h3>
The amount of a good that users are willing and competent to acquire at various prices during a certain period of time is known as demand.
<u>Computation of Price</u>:
According to the given information,
Let, the selling price be x.
Salvage Value = 40% of x
Cost Price (C.P.) = $2.48
Mean = 200 gallons
Standard Deviation = 20 gallons
Service Level = 95%
Now, find the Cost of underage (Cu):
Then, the cost of Overage (Co):
Now, the service level is:
Therefore, the selling price that a gallon of milk sells is $5.77.
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