1. What is actual inventory and service level?

2. If the order frequency is 10 orders in a 6 month period, is the current actual for inventory and service level optimal? Why or why not?

3. Name two optimal points (service level, inventory $) on the curve representing an order frequency of 5 orders in a 6 month period.

4. If inventory for this business was very expensive and capacity was very cheap, what point (inventory $, service level) on the curve representing 10 orders in a 6 month period would you choose if customers demanded quick deliveries? Please provide rationale for your decision?

INVENTORY $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 H $20,000 40% 50% 70% 90% 100 Fill Rate 20 ordersM6 Month 5 Ordersv6 Month 10 Ordersne Month- Predicted Actuall