The Amount of Safety Stocks Held by a Firm Generally

question 163

Multiple Choice

The amount of safety stocks held by a firm generally

• A) increases with greater uncertainty of demand forecasts.
• B) increases with higher costs (in terms of lost sales and lost goodwill)of stockouts.
• C) increases with a greater chance that delays will occur in receiving shipments.
• D) decreases as the cost of carrying additional inventory increases.
• E) All of the above

---

Definitions:

Product

A good or service offered by a company to customers.

Base

In mathematics, the number that is raised to a power in exponential expressions or the substance in chemistry that accepts protons or donates electrons.

Common Factors

Numbers or expressions shared as factors by two or more numbers or algebraic expressions.

Factors

Numbers or expressions that divide into another number or expression exactly, without leaving a remainder.