A Company Recently Lowered Its Service Performance from 99% Product

question 21

Multiple Choice

A company recently lowered its service performance from 99% product availability to 97% 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% from 97%.Such a further change is likely to save:

• A)less than $1 million
• B)about another $1 million
• C)more than $1 million

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Definitions:

Abdominal Ultrasound

A non-invasive imaging technique that uses sound waves to create images of organs within the abdomen, aiding in the diagnosis of various conditions.

Pelvic or Fetal Ultrasound

A non-invasive imaging technique used to observe the developing fetus or pelvic organs using high-frequency sound waves.

Electron

A minute particle of matter charged with the smallest known amount of negative electricity; opposite of proton.

Negative Electricity

An outdated term historically used to describe what is now known as the flow of electrons, or electric current, particularly in the context of static electricity.