If,in a perishable product inventory situation,the probabilities of demand being 1,2,3,or 4 units are 0 3,0 3,0 2,and 0 2 respectively,what is the service level if two units are stocked?
A)0 2
B)0 3
C)0 5
D)0 6
E)0 8

Question

If,in a perishable product inventory situation,the probabilities of demand being 1,2,3,or 4 units are 0 3,0 3,0 2,and 0 2 respectively,what is the service level if two units are stocked?
A)0 2 
B)0 3
C)0 5 
D)0 6 
E)0 8

Quizplus · Accepted Answer

The service level is the probability that demand is met without a stockout. If two units are stocked, the demand can be 1 or 2 units. The probabilities for these demands are 0.3 and 0.3, respectively. Therefore, the service level is 0.3 + 0.3 = 0.6.

If,in a Perishable Product Inventory Situation,the Probabilities of Demand Being