Multiple Choice
Which of the following statements about service level in a fixed order quantity inventory system is FALSE?
A) Service level is the probability that lead time demand will not exceed the reorder level quantity.
B) Service level policies typically compare the percentage of demand that is met from inventory with the cost of holding inventory.
C) A 95% service level implies that 95% of the time 100% of demand is satisfied.
D) There is a linear relationship between service level and reorder level.
Correct Answer:
Verified
Correct Answer:
Verified
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