Explain the Meaning and Significance of Safety Stock in Managing

question 48

Essay

Explain the meaning and significance of safety stock in managing inventory

---

Definitions:

Product Differentiation

A strategy used by companies to distinguish their products from those of competitors based on features, quality, or design.

Economic Welfare

The overall well-being and standard of living of individuals and societies, often measured by factors such as income, health, and education.

Economies of Scale

Businesses enjoy cost savings resulting from their size of operations, wherein the cost per unit produced usually drops with greater scale.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs, access to technology, and strict regulations.