Which One of the Following Is Implied by an Annual

question 45

Multiple Choice

Which one of the following is implied by an annual service level of 95 percent?

• A) Approximately 95 percent of demand during lead time will be satisfied.
• B) The probability is .95 that demand will exceed supply during lead time.
• C) The probability is .95 that demand will equal supply during lead time.
• D) The probability is .95 that demand will not exceed supply during lead time.
• E) Approximately 95 percent of all demand will actually be satisfied directly from on-hand inventory.