Stefani Foods produces fresh pasta products for sale through local supermarkets. One product that is quite popular is fresh linguini and clam sauce. This item has a shelf life of two weeks and costs Stefani $1.19 per unit to produce. The product retails at a suggested price of $1.99 and is sold to supermarkets at a wholesale price of $1.46. Many supermarkets receive only one delivery per week of Stefani products. In these instances, the delivery route agent is instructed to pick up any unsold linguini to return to the company. The supermarkets receive full credit on these returns, and the returned merchandise is sold in the Stefani owned Thrift Store at a retail price of $1.05. Such sales are estimated to net the company $0.83 per unit. Van’s Supermarket estimates that weekly demand for the linguini follows a uniform distribution between 160 and 239 units. Stefani delivers to Van’s once a week. Determine the optimal stocking quantity for the linguini if the goodwill cost to Stefani associated with the supermarket’s running out of inventory is:
a. $0.10
b. $0.50
c. $1.00
d. $5.00
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