Additional inventory that is kept over and above the average amount required to meet demand is called _____ inventory.
A) seasonal
B) work-in-process
C) finished goods
D) safety stock

Question

Quizplus · Accepted Answer

Safety stock is inventory that is held in excess of average demand to protect against stockouts. It serves as a buffer to ensure that demand fluctuations and supply chain uncertainties do not lead to stockouts. Seasonal inventory is inventory held to meet expected increase in demand during certain periods of the year. Work-in-process inventory refers to products that are still in the process of being manufactured. Finished goods inventory is the inventory of completed products that are ready for sale.

Additional Inventory That Is Kept Over and Above the Average