Question

What is the definition of safety stock in the context of inventory management?

A) Inventory used in the depletion cycle of analogous equals

B) Equities in modes of motorized transportation

C) Extra inventory companies hold to protect against demand variability

D) Reserves allocated for speculative investment opportunities

Answer 1

Safety stock is extra inventory companies hold to protect against demand variability in the context of inventory management.

Step-by-step explanation:

The correct definition of safety stock in the context of inventory management is C) Extra inventory companies hold to protect against demand variability. Safety stock is the additional amount of inventory that companies maintain above their normal inventory levels to guard against unexpected fluctuations in customer demand or supply chain disruptions. It acts as a buffer to ensure that companies can meet customer needs even in the face of uncertainties.