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Bruno Fruscalzo decided to start a small production facility in Sydney to sell gelato to local restaurants. His local milk supplier charges $0.50 per kg
Bruno Fruscalzo decided to start a small production facility in Sydney to sell gelato to local restaurants. His local milk supplier charges $0.50 per kg of milk plus a $20 delivery fee (the $20 fee is independent of the amount ordered). Bruno's holding cost is $0.03 per kg per month. He needs 9,000 kg of milk per month.
If Bruno's supplier only accepts orders that are an integer multiple of 1,000 kilograms, how much should Bruno order to minimize ordering and holding costs per gallon? Please justify your answer numerically.
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