The required safety inventory
A)grows rapidly with a decrease in the desired product availability.
B)grows rapidly with an increase in the desired product availability.
C)decreases with an increase in the desired product availability.
D)remains stable with an increase in the desired product availability.

Question

Quizplus · Accepted Answer

The required safety inventory grows rapidly with an increase in the desired product availability. This is because a higher desired product availability means there is less tolerance for stockouts or delays in production, which increases the need for safety stock as a buffer against unexpected supply chain disruptions. On the other hand, a lower desired product availability may imply a higher tolerance for stockouts, and therefore a lower need for safety inventory.

The Required Safety Inventory