In a Single-Period Model, If Shortage Cost Is Four Times

question 29

Multiple Choice

In a single-period model, if shortage cost is four times excess cost, then the optimum service level is _____ percent.

• A)100
• B)80
• C)60
• D)40
• E)20

---

Definitions:

Malpractice Claim

A lawsuit brought against a professional (e.g., a doctor, lawyer) for harm caused due to their negligence or failure to meet the standards of their profession.

Valued Policy

A type of insurance policy that pays out a predetermined amount in the event of a total loss.

Open Policy

An insurance policy that provides coverage for all shipments or transfers under certain conditions over a specific period of time without the need for individual certificates.

Fair Market Value

The price that a property would sell for on the open market, where both buyer and seller have reasonable knowledge of all pertinent facts.