Asked by
Himanshu Sharma
on Oct 18, 2024
Verified
The appropriate level of safety inventory is determined by the uncertainty of both demand and supply and the desired level of cycle inventory.
Safety Inventory
Extra inventory held to guard against uncertainty in the demand or supply chain, ensuring that shortages are minimized.
Demand Uncertainty
The lack of predictability in consumer demand for products or services, making inventory or production planning challenging.
- Identify what factors contribute to determining the right amount of safety inventory and understand the necessary trade-offs.
Verified Answer
SV
Learning Objectives
- Identify what factors contribute to determining the right amount of safety inventory and understand the necessary trade-offs.
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