To avoid stockouts,manufacturers might carry extra raw materials.This excess is known as safety stock.

Question

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Safety stock is a buffer of extra inventory that manufacturers carry to ensure that they do not run out of stock or raw materials in case of unexpected demand, delayed shipments, or other supply chain disruptions. This helps to minimize the risk of stockouts and ensure that production can continue uninterrupted, which is essential for meeting customer demand and maintaining business operations. Therefore, the statement is true that manufacturers carry extra raw materials as safety stock to avoid stockouts.

To Avoid Stockouts,manufacturers Might Carry Extra Raw Materials