Answered step by step
Verified Expert Solution
Link Copied!

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Process

Authors: Lee Long

4th Edition

978-0201822939,0201822938

More Books

Students also viewed these General Management questions

Question

=+Robinson Crusoe can gather 10 coconuts or catch 1 fish per hour.

Answered: 1 week ago