Part 1: Order Fill Rate Firm XA is facing the following situation with their orders: 1600 orders per year 120 units per order Net cost per unit = $350 When they do not have all the products required, the orders are either backordered or cancelled: 75% of incomplete orders are backordered; 25% are cancelled. Costs per (backed) order = $300 When orders are backordered, customers receive a discount. Invoice deduction per backordered order=$250 Answer the following questions for Firm XA (Show your calculations for all questions): 1. What is the total amount of lost profit/cash flow at a 90% order fill rate? (Points: 20) 2. What is the total amount of lost profit/cash flow at a 95% order fill rate? (Points: 20) 3. What is the money difference in lost profit/cash flow? Are they increasing or decreasing the lost profit/cash flow from the 5% increase in order fill rate? Explain (Points: 10) Part 2: On-Time Delivery Firm YB is a trucking company and is facing the following situation: 800 deliveries per year Revenue per delivery = $10,000 Net cost as a percent of revenue = 60% When they cannot make deliveries on time, 80% of late deliveries are redelivered; 20% are cancelled. Cost of redelivery = $400 When orders are redelivered, customers receive a discount. Invoice deduction for redeliveries = $200 Answer the following questions for Firm YB (Show your calculations for all questions): 4. What is the total amount of lost profit/cash flow from an 85% on-time delivery rate? (Points: 20) 5. What is the total amount of lost profit/cash flow from a 95% on-time delivery rate? (Points: 20) 6. What is the money difference in lost profit/cash flow? Are they increasing or decreasing the lost profit/cash flow from the 10% increase in on-time delivery? Explain (Points: 10)

Part 1: Order Fill Rate Firm XA is facing the following situation with their orders: - 1600 orders per year - 120 units per order - Net cost per unit =$350 - When they do not have all the products required, the orders are either backordered or cancelled: 75% of incomplete orders are backordered; 25% are cancelled. - Costs per (backed) order =$300 - When orders are backordered, customers receive a discount. Invoice deduction per backordered order =$250 Answer the following questions for Firm XA (Show your calculations for all questions): 1. What is the total amount of lost profit/cash flow at a 90% order fill rate? (Points: 20) 2. What is the total amount of lost profit/cash flow at a 95% order fill rate? (Points: 20) 3. What is the money difference in lost profit/cash flow? Are they increasing or decreasing the lost profit/cash flow from the 5% increase in order fill rate? Explain (Points: 10) Part 2: On-Time Delivery Firm YB is a trucking company and is facing the following situation: - 800 deliveries per year - Revenue per delivery =$10,000 - Net cost as a percent of revenue =60% - When they cannot make deliveries on time, 80% of late deliveries are redelivered; 20% are cancelled. - Cost of redelivery =$400 - When orders are redelivered, customers receive a discount. Invoice deduction for redeliveries = $200 Answer the following questions for Firm YB (Show your calculations for all questions): 4. What is the total amount of lost profit/cash flow from an 85% on-time delivery rate? (Points: 20) 5. What is the total amount of lost profit/cash flow from a 95% on-time delivery rate? (Points: 20) 6. What is the money difference in lost profit/cash flow? Are they increasing or decreasing the lost profit/cash flow from the 10% increase in on-time delivery? Explain (Points: 10) Part 1: Order Fill Rate Firm XA is facing the following situation with their orders: - 1600 orders per year - 120 units per order - Net cost per unit =$350 - When they do not have all the products required, the orders are either backordered or cancelled: 75% of incomplete orders are backordered; 25% are cancelled. - Costs per (backed) order =$300 - When orders are backordered, customers receive a discount. Invoice deduction per backordered order =$250 Answer the following questions for Firm XA (Show your calculations for all questions): 1. What is the total amount of lost profit/cash flow at a 90% order fill rate? (Points: 20) 2. What is the total amount of lost profit/cash flow at a 95% order fill rate? (Points: 20) 3. What is the money difference in lost profit/cash flow? Are they increasing or decreasing the lost profit/cash flow from the 5% increase in order fill rate? Explain (Points: 10) Part 2: On-Time Delivery Firm YB is a trucking company and is facing the following situation: - 800 deliveries per year - Revenue per delivery =$10,000 - Net cost as a percent of revenue =60% - When they cannot make deliveries on time, 80% of late deliveries are redelivered; 20% are cancelled. - Cost of redelivery =$400 - When orders are redelivered, customers receive a discount. Invoice deduction for redeliveries = $200 Answer the following questions for Firm YB (Show your calculations for all questions): 4. What is the total amount of lost profit/cash flow from an 85% on-time delivery rate? (Points: 20) 5. What is the total amount of lost profit/cash flow from a 95% on-time delivery rate? (Points: 20) 6. What is the money difference in lost profit/cash flow? Are they increasing or decreasing the lost profit/cash flow from the 10% increase in on-time delivery? Explain (Points: 10)