Assume an organization's current service level on order fill is as follows:

Current order fill= 70%

Number of orders per year = 10,000

Percent of unfilled orders back-ordered = 85%

Percent of unfilled orders canceled = 15%

Backorder costs per order = $100

Lost pretax profit per canceled order= $15,000

Invoice deductions per order = $250.00

a- What is the nature of cash flow to increasing order fill rate?

b- Calculate cash flow for order fills rates from 70% to 95%, by 5% increments.

c- What is the nature of cash flow lost to increasing order fill rate?

d- What does this mean to supply chain managers regarding investments to decrease cash flow lost?