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Show all work Compute the cash flow lost for order fill rate of 70, 80, and 99 percent. Use the following information. 100 units per
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Compute the cash flow lost for order fill rate of 70, 80, and 99 percent. Use the following information. 100 units per order (average) 25,000 orders per year Pretax profit per unit is $I00 Pretax profit per order is $10,000 Invoice deduction per order is $250 Percentage of incomplete orders back-ordered is 70% Back order costs per order: administrative = $25.00; rehandling = $50.00; redelivery = $100.00 Percentage of incomplete orders cancelled is 30% Use this formula Cash Flow Lost = (Number of Incomplete Orders Back-Ordered times Back Order Cost per Order) + (Number of Incomplete Orders Cancelled times Lost Pretax Profit per Order) + (Number of Incomplete Back-Ordered times Invoice Deduction per Order)Step by Step Solution
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