A Service Level of 95% Means There Is a 0

question 36

Multiple Choice

A service level of 95% means there is a 0.95 probability

• A)of meeting all demand.
• B)of a stockout.
• C)that supply will exceed demand.
• D)that demand will be met during the lead time.

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Definitions:

Benefits of Budgeting

Benefits of budgeting include providing a financial framework for decision making, setting financial targets, and monitoring financial performance against those targets.

Production Budget

A forecast of the units that must be produced to meet anticipated sales, used in planning the required production levels.

Rolling Budget

A financial plan that is continually updated by adding a new period (month, quarter, etc.) as the current period concludes, ensuring the budget extends a constant length into the future.

Direct Labor Budget

An estimation of the total amount of labor cost that will be required for production over a specific period.