When Considering Safety Stock and Its Effect on EOQ, Which

question 7

Multiple Choice

When considering safety stock and its effect on EOQ, which of the following statements is false?

• A) Safety stock is equal to the potential excess usage of an input.
• B) The reorder point is affected by the existence of safety stock.
• C) Safety stock decreases inventory holding costs.
• D) Safety stock decreases the potential costs caused by inventory shortages.
• E) Fluctuations in monthly usage of a material indicate the desirability of a safety stock.

---

Definitions:

Dynamic Traits

Refer to characteristics of an individual’s personality that are adaptive and can change in response to different situations or over time.

Assessment Technique

A method or procedure used to evaluate or measure an individual's ability, skill, competence, or characteristic.

T-data

This term is a shortened form for "test data," referring to information collected from psychological tests that aim to measure individual traits, abilities, or attitudes.

Factor-analytic Research

A statistical method used to describe variability among observed variables in terms of a potentially lower number of unobserved variables called factors.