The Optimal Safety Stock Level Is the Quantity of Safety

question 87

Multiple Choice

The optimal safety stock level is the quantity of safety stock that minimises the sum of the annual relevant:

• A)ordering costs and purchasing costs.
• B)stockout costs and carrying costs.
• C)ordering costs and carrying costs.
• D)ordering costs and stockout costs.

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Definitions:

Sum

The total obtained by adding together a set of numbers or quantities.

Restriction

A limitation or condition that confines or restricts something's scope or action.

Quantity

The amount or number of a material or item required or available, often used in inventory management and production planning.

Constraint

A limitation or restriction in a process or system that can impact performance or outcomes.