Question: the question in the picture Gulf Electronics LLC, UAE would like to study the financial impact of managing the order fill rate. Its current order

the question in the picture Gulf Electronics LLC,

the question in the picture

Gulf Electronics LLC, UAE would like to study the financial impact of managing the order fill rate. Its current order fill rate is 80%. It would like to increase its customer order fill rate to 92%. The data related to orders and costs associated with them is given in the table. Measurement Factor Data No. Orders per year 5,000 Percent of unfilled orders back-ordered 70% Percent of unfilled orders cancelled 30% Back-order cost per order a. Administrative Costs 30 AED 40 AED b. Re-handling Costs c. Re-delivery Costs 80 AED Lost pretax profit per cancelled order 12,500 AED 3. Analyze the above data and provide your comments on the financial impact of increasing the customer order fill rate from 80 to 92 percent to Gulf Electronics LLC

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