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:

Influence

The capacity or power of individuals or groups to effect change or impact the beliefs, behaviors, or actions of others.

Communication

The exchange of information or news between people, through speaking, writing, or using some other medium.

Goal

A desired result or outcome that a person or system envisions, plans, and commits to achieve.

Self-Directed Work Teams

Groups of employees who are given the autonomy to plan and execute their own tasks, often responsible for a complete business operation or process.