Extra inventory that is used to avoid stockouts is known as
A)planned shortages.
B)quantity discounts.
C)safety stock.
D)service level.
E)ABC analysis.

Question

Quizplus · Accepted Answer

Safety stock is extra inventory that is held to prevent stockouts when demand is higher than expected or when there are unexpected disruptions in the supply chain. It serves as a buffer to maintain customer service levels and avoid lost sales. Planned shortages would be intentionally limiting inventory, quantity discounts refer to price breaks for larger quantities, service level is a performance indicator measuring the percentage of orders delivered on time, and ABC analysis is a method to categorize inventory by importance or value.

Extra Inventory That Is Used to Avoid Stockouts Is Known