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zheka24 [161]
3 years ago
7

In the single-period model, if shortage cost is $20 per unit short, excess cost is $10 per unit excessive, and the optimum servi

ce level is calculated and denoted by S. If the shortage cost increases by 20% and excess cost increases by 50%, then the optimum service level equals ______.
Business
1 answer:
o-na [289]3 years ago
8 0

Answer:

c. 90%

Explanation:

Options are <em>"</em><em>a</em><em>. 52% of S. </em><em>b</em><em>. 67% of S. </em><em>c</em><em>. 90% of S. </em><em>d.</em><em> 60% of S. </em><em>e.</em><em> 48% of S"</em>

<em />

Earlier , Cu = 20 , Co = 10

Service Level S = Cu/(Cu+Co)

Service Level S = 20 / (20 + 10)

Service Level S = 20/30

Service Level S = 0.667

After, Cu = 20*(1+20%)

Cu = 20 * 1.20

Cu = 24

Co = 10*(1+50%)

Co = 10*1.50

Co = 15

Updated Service Level = 24 / (24+15)

Updated Service Level = 24/39

Updated Service Level = 0.615

Proportion of S = 0.615/0.667

Proportion of S = 0.92

Proportion of S = 92%

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