If demand is not uniform and constant, then stockout risks can be controlled by:
A) increasing the EOQ.
B) spreading annual demand over more frequent, but smaller, orders.
C) raising the selling price to reduce demand.
D) adding safety stock.
E) reducing the reorder point.

Question

Quizplus · Accepted Answer

Adding safety stock helps to cover the fluctuation in demand and reduces the risk of stockouts. This ensures that there is backup inventory that can be used immediately in case of unexpected demand.

If Demand Is Not Uniform and Constant, Then Stockout Risks