Safety stock ______.
A)is the minimal level of inventory that a company seeks to maintain a buffer against the mismatch between forecasted and actual demand
B)is the level of finished products that a company maintains to take advantage of demand in new markets
C)is the level of finished products that a company maintains to ensure it is safe from government inspection
D)is the level of finished products that a company needs to manufacture to ensure the price is protected from increase or decrease

Question

Quizplus · Accepted Answer

Safety stock is an additional amount of inventory that a company maintains above its regular inventory to protect against unexpected demand or supply chain disruptions. It acts as a buffer to prevent stockouts and helps to ensure that the company can meet customer demand even during times of unforeseen fluctuations. Therefore, option A is the correct choice. The other options are incorrect as they do not describe the concept of safety stock accurately.

Safety Stock ______