The Need for Safety Stocks Can Be Reduced by an Operation

question 25

Multiple Choice

The need for safety stocks can be reduced by an operation strategy which:

• A)increases lead time
• B)increases lot sizes
• C)decreases ordering costs
• D)decreases lead time variability
• E)None of the above

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Definitions:

Business Leaders

Individuals in positions of authority within companies who are responsible for decision-making and strategic direction.

Bounded Rationality

A theory proposing that people base their choices on the restricted data they have access to and within the limitations of their cognitive abilities.

Availability Phenomena

A cognitive bias where individuals give undue weight to information that is readily available to them when making decisions.

Limited Search

The process of looking for information or solutions with restrictions, often due to time, resources, or access limitations.