________ is inventory held at all times regardless of the quantity of inventory ordered using the EOQ model.
A)Appraisal
B)Prevention
C)Bottleneck
D)Safety stock
E)Reorder point

Question

Quizplus · Accepted Answer

Safety stock is the inventory that is held at all times to protect against stockouts in case of unexpected demand or delays in replenishment. It is calculated using factors such as lead time, demand variability, and service level. The EOQ model calculates the optimal order quantity to minimize ordering and holding costs, but it does not account for demand uncertainty or lead time variability. Therefore, safety stock is usually added to the EOQ to ensure adequate inventory levels.

________ Is Inventory Held at All Times Regardless of the Quantity