Looking for the answer to the question below related to Management?
The proper quantity of safety stock is typically determined by:
A. using a single-period model.
B. carrying sufficient safety stock so as to eliminate all stockouts.
C. multiplying the EOQ by the desired service level.
D. setting the level of safety stock so that a given stockout risk is not exceeded.
E. minimizing total costs.
The Correct Answer Is:
- D. setting the level of safety stock so that a given stockout risk is not exceeded.
I hope you got the answer to your question.