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.

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