The Winfield Distributing Company Has Maintained an 80% Service Level

question 122

Essay

The Winfield Distributing Company has maintained an 80% service level policy for inventory of string trimmers. Mean demand during the reorder period is 170 trimmers, and the standard deviation is 60 trimmers. The annual cost of carrying one trimmer in inventory is $6. The area sales people have recently told Winfield's management that they could expect a $400 improvement in profit (based on current figures of cost per trimmer) if the service level were increased to 99%. Is it worthwhile for Winfield to make this change?

Comprehend the principles of business etiquette and their importance in professional interactions.

Recognize the significance of precision and professionalism in job application materials.

Understand the impact of passion and deep interest in one's work on career advancement.

Grasp the characteristics and contributions of star performers within organizations.

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Definitions:

Loss Frames

A communication tactic that presents choices or outcomes in terms of potential losses, influencing decision-making and behavior.

Concrete Information

Specific, detailed data or facts that are grounded in reality and can be proven through direct observation or experience.

Expectancy Disconfirmation Model

A theory that suggests consumer satisfaction is based on the gap between expected and actual performance of a product or service.

Consumer Dissatisfaction

A negative emotional state that occurs when a product or service fails to meet a consumer's expectations.