Customer service is often viewed as the primary interface between logistics and marketing. Discuss the nature of this interface and how it might be changing.

$2.$ Assume an organization$$s current service level on order fill is as follows:

Current order fill $=80\%$

Number of orders per year $=5,000$

Percent of unfilled orders back$-$ordered $=70\%$

Percent of unfilled orders cancelled $=30\%$

Back order costs per order $=$ $$150$

Lost pretax profit per cancelled order $=$ $$12,500$

a$.$What is the lost cash flow to the seller at this $80$ percent service level?

b$.$ What would be the resulting increase in cash flow if the seller improved order fill to $92$ percent?

c$.$ If the seller invested $$2$ million to produce this increased service level, would the investment be justified financially?

Ch$\mathrm{.}9,$

$1.$ Explain why inventory costs and inventory levels have declined relative to GDP over the last $20$ years. Is this beneficial to the economy? Why or why not?

$2.$ Why has the JIT approach to inventory control become popular in some industries? How does the JIT approach compare to the EOQ approach to inventory management? Should JIT be adopted by all inventory managers? Why or why not?