A bank branch must keep a stock of cash in hand for customer withdrawlss. The net daily withdrawal rate is $10000. The opportunity cost of cash is 6% per year. Replenishment of cash stock from the central bank requires careful accounting and contracting t

A bank branch must keep a stock of cash in hand for customer withdrawlss. The net daily withdrawal rate is $10000. The opportunity cost of cash is 6% per year. Replenishment of cash stock from the central bank requires careful accounting and contracting to an armored delivery service. The cost is $400 per replenishment and requires two days of notice to the carrier. Determine the optimal policy for obtaining cash.