The need for safety stock can be reduced by an inventory planning strategy which:
A)increases lead time.
B)increases lead time variability.
C)increases lot sizes.
D)decreases ordering costs.
E)decreases lead time variability.

Question

Quizplus · Accepted Answer

Decreasing lead time variability means that there is more predictability and reliability in the timing of receiving inventory. This reduces the need for safety stock because there is less risk of stockouts due to unexpected delays. Increasing lead time, lead time variability, or lot sizes would increase the need for safety stock, while decreasing ordering costs may not affect the need for safety stock. Therefore, the best choice to reduce the need for safety stock is to decrease lead time variability.

The Need for Safety Stock Can Be Reduced by an Inventory