At the annual managers' planning conference, Jackie Conrad asks the other managers to consider her proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer orders from 85% to 90%. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service.

Question

Quizplus · Accepted Answer

Jackie Conrad is proposing to increase the quantity of inventory, which means storing more goods in the warehouse, resulting in higher warehousing costs. She believes that increasing inventory will lead to better customer service by filling more orders completely. This indicates that she is willing to bear the additional costs associated with storage and handling of inventory. There is no indication that lowering response time, increasing transportation costs, or increasing order processing costs are relevant to her proposal. The reference to "higher performance levels" is too general to determine a specific choice. Therefore, the answer is B.

At the Annual Managers' Planning Conference, Jackie Conrad Asks the Other