You run a bakery specializing in fresh baked goods. (You donate all leftover items to a charity at the end of each day.) You have hired a consultant to help you forecast demand and optimize your inventory decisions. The consultant has suggested that once the forecasts are developed, you should always pick a lower service level for products with more variable demand. That is, holding everything else constant, the optimal service level should decrease as the variance of demand goes up. Is the consultant right? Justify your answer.

Circle one: The consultant is Right Wrong