Question

Both ________ and ________ increase as the safety inventory is increased.

a.fill rate, cycle service level
b.lead time, cycle service level
c.fill rate, lead time
d.reorder point, lead time

Answer 1

False. Shortage occurs in a replenishment cycle only if the demand during the lead time exceeds the ROP. True. The fill rate increases and the cycle service level decreases as the safety inventory is increased. False. For the same safety inventory, an increase in lot size increases the fill rate but not the cycle service level.