The purpose of safety stock is to
A) control the likelihood of a stock-out due to the variability of demand during lead time
B) always have replacement items in case of defects
C) maintain quality standards
D) guard against dramatic decreases in demand

Question

Quizplus · Accepted Answer

Safety stock is a buffer inventory that is maintained to protect against stock-out due to demand variability during lead time. It helps ensure that there is enough inventory to meet customer demand even when there is unexpected demand or lead time variations. Options B, C, and D are not the primary purposes of safety stock.

The Purpose of Safety Stock Is to