Distortion in MRP systems can be minimized when safety stock is held at the:
A) purchased component or raw material level.
B) work-in-process level.
C) finished goods level.
D) A and B
E) A and C

Question

Quizplus · Accepted Answer

Holding safety stock at both the purchased component or raw material level and the finished goods level helps minimize distortion in MRP systems. Safety stock at the purchased component or raw material level ensures that there is enough inventory to support production, while safety stock at the finished goods level helps prevent stockouts and delays in fulfilling customer orders. Holding safety stock at the work-in-process level can actually increase distortion, as it may mask production problems and cause excess inventory to be held in the system.

Distortion in MRP Systems Can Be Minimized When Safety Stock