Question

Safety Stock is used to

A.

provide a buffer in the event of an incorrect cycle count

B.

mitigate the risk of stockouts due to variations in demand or lead time

C.

replace defective units in stock with good ones

D.

protect against a sudden decrease in demand

E.

communicate the economic order quantity

Answer 1

Ans : B

this term utilized by logistical to depict a dimension of additional stock that is kept up to alleviate danger of stockouts (deficiency in crude material or bundling) brought about by vulnerabilities in free market activity. Satisfactory well-being stock dimensions license business activities to continue as per their plans.The reason for security stock is to moderate the danger of stockout because of variety popular or lead time. Stock outs are the immediate loss of business. The variety popular is brought about by abrupt ascent sought after, ascribed to regular or arbitrary economic situations, which is generally known as impromptu utilization. Though, lead time variety is generally credited to defer in transportation, disturbance at providers end or strikes. In both the cases the firm has no power over the event of the occasions and subsequently the variety, the supervisors can just deal with this variety by keeping adequate well-being stock.When speculation firms and budgetary consultants evaluate their customer's resistance for hazard, they frequently inquire.