The optimal safety stock level is the quantity of safety stock that minimises the sum of the annual relevant:
A)ordering costs and purchasing costs.
B)stockout costs and carrying costs.
C)ordering costs and carrying costs.
D)ordering costs and stockout costs.

Question

Quizplus · Accepted Answer

The optimal safety stock level is determined based on the balance between stockout costs and carrying costs. Ordering costs are not considered in determining the safety stock level.

The Optimal Safety Stock Level Is the Quantity of Safety