The Purpose of Safety Stock Is To

question 15

Multiple Choice

The purpose of safety stock is to:

• A) replace failed units with good ones.
• B) eliminate the possibility of a stockout.
• C) eliminate the likelihood of a stockout due to erroneous inventory tally.
• D) control the likelihood of a stockout due to variable demand and/or lead time.
• E) protect the firm from a sudden decrease in demand.

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Definitions:

Social Class

A division of a society based on social and economic status, affecting access to resources and opportunities.

Access to Resources

The ability or opportunity to obtain and use necessary materials, services, or valuable information.

Opportunities

Prospects or situations that present possibilities for advancement, achievement, or success, often influenced by socio-economic factors.

Married Couples

Two individuals legally united through marriage, recognized both socially and legally, forming a primary social and economic unit.