Michael’s Offi ce Supply (MOS) sells offi ce furniture,equipment, and supplies. Th is week the company has received 50customer orders. Each order has an average of fi ve line items. Th eaverage dollar amount of each order is $1200. MOS was able toship 47 of the 50 orders on schedule.(a) Using the percentage of orders shipped on time, calculatethe customer service level.(b) If Michael’s calculates customer service level by using thepercentage of line items shipped on schedule, how manyline items must be shipped to achieve the same customerservice level calculated in part (a)?(c) If Michael’s calculates customer service level by thepercentage of dollar volume shipped, how many dollarsof product must be shipped to achieve the same customerservice level calculated in part (a)?(d) What factors determine the customer service levelmeasure that MOS should use?
Michael’s Offi ce Supply (MOS) sells offi ce furniture,
equipment, and supplies. Th is week the company has received 50
customer orders. Each order has an average of fi ve line items. Th e
average dollar amount of each order is $1200. MOS was able to
ship 47 of the 50 orders on
(a) Using the percentage of orders shipped on time, calculate
the customer service level.
(b) If Michael’s calculates customer service level by using the
percentage of line items shipped on schedule, how many
line items must be shipped to achieve the same customer
service level calculated in part (a)?
(c) If Michael’s calculates customer service level by the
percentage of dollar volume shipped, how many dollars
of product must be shipped to achieve the same customer
service level calculated in part (a)?
(d) What factors determine the customer service level
measure that MOS should use?
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