Which one of the following is implied by an annual service level of 95 percent?
A) Approximately 95 percent of demand during lead time will be satisfied.
B) The probability is .95 that demand will exceed supply during lead time.
C) The probability is .95 that demand will equal supply during lead time.
D) The probability is .95 that demand will not exceed supply during lead time.
E) Approximately 95 percent of all demand will actually be satisfied directly from on-hand inventory.
Correct Answer:
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