The role of safety stock in an organization is to
A)reduce the lead time for an order to be received.
B)reduce the probability of a stockout.
C)reduce the order point.
D)decrease the economic order quantity.

Question

Quizplus · Accepted Answer

Safety stock is an additional quantity of stock kept by a company to reduce the risk of stockouts due to demand variability, supply chain disruptions, or unanticipated events. Its role is to decrease the probability of a stockout, ensuring that customers' demand can be met despite unexpected changes in demand or supply. Safety stock does not reduce the lead time for an order to be received, reduce the order point, or decrease the economic order quantity.

The Role of Safety Stock in an Organization Is to