When comparing the safety stock of the cycle service level (SSc) approach with the safety stock level of the unit service level (SSu) approach, other things being equal: A)SSc SSu. B)SSc = SSu. C)SSc

Question

When comparing the safety stock of the cycle service level (SSc) approach with the safety stock level of the unit service level (SSu) approach, other things being equal:
A)SSc > SSu.
B)SSc = SSu.
C)SSc < SSu.
D)no necessary relationship exists.

Quizplus · Accepted Answer

The cycle service level approach considers the overall service level for a cycle, while the unit service level approach considers the service level for individual units. Since the cycle service level approach takes into account the variability of demand over the entire cycle, it typically results in a higher safety stock level compared to the unit service level approach, which only accounts for the variability of demand for each individual unit. Therefore, SSc is generally greater than SSu.

When Comparing the Safety Stock of the Cycle Service Level