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 percent to 90 percent. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service.

Question

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Increasing the quantity of inventory to a five-week supply will require additional warehousing space and may result in higher warehousing costs. Jackie is willing to incur this additional cost in order to improve customer service by increasing the percentage of completely filled customer orders from 85 percent to 90 percent. The other options listed are not directly related to inventory quantities and would not have the same impact on customer service levels.

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