If demand is not uniform and constant, then stockout risks can be controlled by all of the following except
A) increasing the EOQ.
B) placing an extra order.
C) raising the selling price to reduce demand.
D) adding safety stock.
E) reducing the reorder point.

Question

Quizplus · Accepted Answer

Increasing the Economic Order Quantity (EOQ) does not directly control stockout risks in the face of variable demand; it optimizes order size to balance ordering and holding costs. Placing extra orders, raising selling prices to reduce demand, and adding safety stock are all strategies to mitigate stockout risks. Reducing the reorder point, however, would likely increase the risk of stockouts by triggering orders too late to meet unexpected increases in demand.

If Demand Is Not Uniform and Constant, Then Stockout Risks