Safety stock exists for which of the following reasons?
A)To allow less expensive purchases by buying more.
B)To allow for transportation time.
C)To provide protection against the uncertainties of supply and demand.
D)None of these selections.

Question

Quizplus · Accepted Answer

Safety stock exists to provide protection against the uncertainties of supply and demand. It is a buffer stock that is maintained to ensure that there are enough goods available in case of unexpected fluctuations in demand or supply. It helps to prevent stockouts and backorders, and ensures that customers can be served in a timely manner. The other options (A and B) are not reasons for safety stock.

Safety Stock Exists for Which of the Following Reasons