Melvin is concerned about not having enough air conditioning units in inventory during June, July, and August so he keeps extra inventory to guard against stockouts during this critical period. Melvin is keeping

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Melvin is keeping extra inventory to guard against stockouts during a critical period. This is an example of safety stock, which refers to extra inventory kept to ensure that there is no stockout due to unexpected demand or delays in supply. It is not just-in-time inventory as Melvin is holding inventory as a precautionary measure, not to reduce lead times. Controlled usage rate refers to methods used to prevent excessive consumption of inventory, which is not relevant in this scenario. Excessive inventory is unnecessary and leads to unnecessary costs, which is not the case here.

Melvin Is Concerned About Not Having Enough Air Conditioning Units