Which One of the Following Statements Is Best

question 170

Multiple Choice

Which one of the following statements is best?

• A) The level of safety stock maintained decreases when the desired cycle-service level increases.
• B) The level of safety stock maintained decreases when the standard deviation of demand during lead time increases.
• C) When no safety stock is maintained, stockouts will occur during approximately 50 percent of the cycles.
• D) The level of safety stock maintained is greater if mean absolute deviation (MAD) is used rather than standard deviation in estimating forecast errors.

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Definitions:

Negligence

Failure to take reasonable care to avoid causing injury or loss to another person, resulting in legal liability for any resulting damages.

Utility Costs

Expenses associated with services such as electricity, water, gas, and sewage required for the operation of a home or business.

Lease Modification

Changes made to the terms of a lease agreement, often involving negotiations between the lessee and lessor.

Bound Agreement

A legally binding contract or arrangement between parties.