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Assume that the buyer has determined the underage cost and overage cost to be Cu= $100 per unit and Co= $10 per unit, respectively. However,
Assume that the buyer has determined the underage cost and overage cost to be Cu= $100 per unit and Co= $10 per unit, respectively. However, the store accountant reminds the buyer that there is an estimated cost of $2.5 for each unit tied up in leftover inventory by the end of the holiday season, as the associated dollar amount invested elsewhere could have yielded a gross profit. In other words, each left over unit will incur an additional cost of $2.5 per unit that the buyer did not account for. What is in your opinion the desired customer service level now, taking the store accountant's information into consideration? (Please keep four decimal places, e.g. 0.1234) Answer: Assume that the buyer has determined the underage cost and overage cost to be Cu= $100 per unit and Co= $10 per unit, respectively. However, the store accountant reminds the buyer that there is an estimated cost of $2.5 for each unit tied up in leftover inventory by the end of the holiday season, as the associated dollar amount invested elsewhere could have yielded a gross profit. In other words, each left over unit will incur an additional cost of $2.5 per unit that the buyer did not account for. What is in your opinion the desired customer service level now, taking the store accountant's information into consideration? (Please keep four decimal places, e.g. 0.1234)
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