Answered step by step
Verified Expert Solution
Question
1 Approved Answer
How might the cost of a stockou Deu 12. Assume an organizations me an organization's current service level on order fill is as follo Current
How might the cost of a stockou Deu 12. Assume an organizations me an organization's current service level on order fill is as follo Current order fill = 80% Number of orders per year = 5,000 Percentage of unfilled orders back-ordered = 70% Percentage of unfilled orders cancelled = 30% Back order costs per order = $150 Lost pretax profit per cancelled order = $12,500 a. What is the lost cash flow to the seller at this 80 percent service level? b. What would be the resulting increase in cash flow if the seller improved ord to 92 percent? C. If the seller invested $2 million to produce this increased service level, wou investment be justified financially? proved order fil service level, would the
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started