If increasing the cost of one of the parts causes the fill rate for that part to
ID: 377421 • Letter: I
Question
If increasing the cost of one of the parts causes the fill rate for that part to go down while the fill rate for other parts to go up in a multiproduct reorder point subject to an aggregate service constraint, the reason is:
a.
It becomes more costly to hold inventory of the altered part necessary to attain the original fill rate
c.
It is economical to make up the overall service by holding more of the other parts
b.
It is economical to hold less of this part, at the expense of poorer service
d.
all of the above
a.
It becomes more costly to hold inventory of the altered part necessary to attain the original fill rate
c.
It is economical to make up the overall service by holding more of the other parts
b.
It is economical to hold less of this part, at the expense of poorer service
d.
all of the above
Explanation / Answer
Answer d. All of the above options are true in order to maintain a low fill rate for one part while raising the fill rate of tehe other part
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