A firm decides to target a 95% service level,realizing that this will require significantly less inventory as compared to a 99% service level.This is an example of a

Question

Quizplus · Accepted Answer

The firm's decision to target a 95% service level in order to reduce inventory is an example of a cost-to-service trade-off. This means that the company is willing to sacrifice a higher level of service in order to reduce costs associated with carrying more inventory. This decision involves weighing the costs of carrying more inventory against the benefits of providing a higher level of service to customers.

A Firm Decides to Target a 95% Service Level,realizing That