Which one of the following statements is best?
A) The level of safety stock maintained decreases when the desired cycle-service level increases.
B) The level of safety stock maintained decreases when the standard deviation of demand during lead time increases.
C) When no safety stock is maintained, stockouts will occur during approximately 50 percent of the cycles.
D) The level of safety stock maintained is greater if mean absolute deviation (MAD) is used rather than standard deviation in estimating forecast errors.

Question

Quizplus · Accepted Answer

When no safety stock is maintained, stockouts will occur during approximately 50 percent of the cycles.

Which One of the Following Statements Is Best