Service Level Is

question 70

Multiple Choice

Service level is:

• A)the probability of stocking out.
• B)the probability of not stocking out.
• C)something that should be minimized in retail.
• D)calculated as the cost of a shortage divided by (the cost of shortage + the cost of overage)for single-period models.
• E)B and D

---

Definitions:

Payback Period

The payback period is the length of time required to recover the cost of an investment.

Rate Of Return

A measure of the gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.

Internal Rate

Typically refers to the internal rate of return (IRR), a metric used in capital budgeting to estimate the profitability of potential investments.

Net Present Value

A calculation that determines the present value of future cash flows minus initial investment; it's used to assess the profitability of an investment.