Supply Chain Management Professional (SCMP) · Question
In inventory management, what does 'safety stock' primarily protect against?
Safety stock is extra inventory held to prevent stockouts caused by variability in demand or lead times, ensuring continuity of supply.
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Question: In inventory management, what does 'safety stock' primarily protect against?
Answer options: ✅ Unforeseen fluctuations in demand or supply lead time.
- Damage to inventory during transit.
- Obsolete inventory due to product obsolescence.
- High carrying costs associated with excess inventory.
Correct answer: Unforeseen fluctuations in demand or supply lead time.
Explanation: Safety stock is extra inventory held to prevent stockouts caused by variability in demand or lead times, ensuring continuity of supply.
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