Safety Stock Exists for Which of the Following Reasons

question 15

Multiple Choice

Safety stock exists for which of the following reasons?

• A)To allow less expensive purchases by buying more
• B)To allow for transportation time
• C)To provide protection against the uncertainties of supply and demand
• D)None of the above

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Definitions:

Superior

In economics, refers to a good for which demand increases as consumer incomes increase, opposite of an inferior good.

Player

An individual, group, or entity participating in a competitive or cooperative activity, often used in the context of games, sports, or market participants.

Negative-sum Games

Situations in which the total losses exceed the total gains, leading to a net decrease in wealth or benefit.

Incentive

A thing that motivates or encourages someone to do something, particularly in economic contexts to influence behaviors.