Answered step by step
Verified Expert Solution
Question
1 Approved Answer
IGLE provides maintenance, repair and operations (MRO) products to its customer The Company decides the optimum customer service level based on profit maximization. According to
IGLE provides maintenance, repair and operations (MRO) products to its customer The Company decides the optimum customer service level based on profit maximization. According to the available data, sales response rate is 0.15% change in revenue for a 1% change in the service level (fill rate). Trading margin is $14 per sealant boxes, inventory carrying cost is 32% per year, average yearly sales amount is 5000 boxes. Cost of each sealant box is $140, demand standard deviation is 20 boxes for a week, and the lead time is 4 weeks. a) Determine the optimal customer service level for the sealant product b) What happens to the optimal customer service level if the inventory carrying cost changed to 30%
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