The Purpose of Safety Stock Is To

question 15

Multiple Choice

The purpose of safety stock is to:

• A) replace failed units with good ones.
• B) eliminate the possibility of a stockout.
• C) eliminate the likelihood of a stockout due to erroneous inventory tally.
• D) control the likelihood of a stockout due to variable demand and/or lead time.
• E) protect the firm from a sudden decrease in demand.

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Definitions:

Constructive Trust

A remedy imposed by a court recognizing a person’s right to ownership of property because of fairness, even though legal title is held by someone else.

Living Will

A living will is a legal document that outlines an individual's wishes regarding medical treatment in circumstances where they are unable to communicate those desires themselves.

Advance Health Directive

A legal document specifying a person's preferences for medical treatment in situations where they might be unable to make decisions for themselves.

Durable Power of Attorney

A legal document that grants a designated person the authority to act on another's behalf in legal or financial matters, even in the event of the latter's incapacitation.