A Company Recently Lowered Its Service Performance from 99 Percent

question 23

Multiple Choice

A company recently lowered its service performance from 99 percent product availability to 97 percent product availability.The change saved the company exactly $1 million per year in inventory carrying cost.Senior management now wants to lower the service level to 95 percent from 97 percent.Such a further change is likely to save:

• A)Less than $1 million.
• B)Exactly $1 million.
• C)More than $1 million.

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Definitions:

Collect Relevant Information

Involves gathering necessary and appropriate data that is significant to the decision-making process in a business or research context.

Marketing Research Approach

A methodology used to gather, analyze, and interpret data about a market, including information about target audiences, competitors, and the effectiveness of marketing strategies.

Time Frame

A specific period during which an event occurs or an objective is supposed to be achieved.

Constraint

A limitation or restriction that may impede the progress or success of a project or organization.