In Setting the Reorder Point for an Item with Variable

Multiple Choice

In setting the reorder point for an item with variable demand,a service level of 95% will imply which of the following?

A) Stockouts may occur only 5 times during the phase of 100 inventory cycles.
B) Five percent (5%) of the supplier shipments will be late.
C) There is a 0.05 probability that the forecasted demand is not accurate.
D) The forecast demand will be accurate 95% of the time.