Which of the Following Statements About Service Level in a Fixed

question 34

Multiple Choice

Which of the following statements about service level in a fixed order quantity inventory system is FALSE?

• A) Service level is the probability that lead time demand will not exceed the reorder level quantity.
• B) Service level policies typically compare the percentage of demand that is met from inventory with the cost of holding inventory.
• C) A 95% service level implies that 95% of the time 100% of demand is satisfied.
• D) There is a linear relationship between service level and reorder level.

---

Definitions:

Implementation

The process of putting a plan, decision, or model into effect in order to achieve a goal or solve a problem.

Decision-Making Stage

The phase in the problem-solving or decision-making process where options are evaluated and a choice is made.

Behavioural Decision Model

A concept in psychology that examines the decision-making processes individuals use, including biases, judgments, and social influences.

Limited Information

A condition in decision-making processes where all necessary data or details are not available to the decision-maker.