The issue of product availability and the level of safety inventory is particularly significant in industries where
A)product life cycles are short and demand is stable.
B)product life cycles are short and demand is very volatile.
C)product life cycles are long and demand is stable.
D)product life cycles are long and demand is very volatile.

Question

Quizplus · Accepted Answer

In industries where product life cycles are short and demand is very volatile, it is important to have a high level of safety inventory to ensure product availability. This is because demand can quickly shift and it may be difficult to replenish inventory in a timely manner. In contrast, industries with long product life cycles and stable demand may not require as much safety inventory since demand can be predicted more accurately and lead times are longer.

The Issue of Product Availability and the Level of Safety