The trade-off that a supply chain manager must consider when planning safety inventory is
A)increasing product availability versus increasing inventory holding costs.
B)decreasing product availability versus decreasing inventory holding costs.
C)increasing product availability versus raising the level of safety inventory.
D)decreasing product availability versus decreasing the level of safety inventory.

Question

Quizplus · Accepted Answer

When planning for safety inventory, a supply chain manager must strike a balance between product availability and inventory holding costs. Increasing safety inventory levels can increase product availability, but it also results in higher inventory holding costs. Conversely, decreasing safety inventory levels may reduce inventory holding costs, but this can compromise product availability. Therefore, option A best captures the trade-off that supply chain managers must consider when planning safety inventory.

The Trade-Off That a Supply Chain Manager Must Consider When