Question: Question 2, Part b) Using the total stockout cost from Part a), calculate the cash flow lost for each of the following fill rate %
Question 2, Part b) Using the total stockout cost from Part a), calculate the cash flow lost for each of the following fill rate % (i.e., customer service): 75%, 80%, 85%, 90%. Then calculate the difference between the rates. 1,400 units per order (average) 3,000 orders per year Pretax profit per unit = $3 Pretax profit per order = $4,200 Invoice deduction per order = $350 Percentage of incomplete orders back-ordered is 77% Stockout costs (per order) = Use Retailer Stockout cost from Part a) Percentage of incomplete orders cancelled is 23%
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