Logisticians must consider the cost-to-service trade-off when deciding how much safety stock they need to store.

Question

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Logisticians often have to balance the cost of storing excess inventory (safety stock) with the risk of running out of stock and losing sales or delaying production. This cost-to-service trade-off requires them to consider various factors such as demand variability, lead time, supplier reliability, and cost of goods sold (COGS) to determine the optimal level of safety stock.

Logisticians Must Consider the Cost-To-Service Trade-Off When Deciding How Much