Which two things drive the need for safety stock? (choose two)?Check All That ApplyDemand variabilityDemand variabilityWarehouse spaceWarehouse spaceDelaysDelaysManufacturing speedManufacturing speedCustomer choiceCustomer choice
Question
Which two things drive the need for safety stock? (choose two)?Check All That ApplyDemand variabilityDemand variabilityWarehouse spaceWarehouse spaceDelaysDelaysManufacturing speedManufacturing speedCustomer choiceCustomer choice
Solution
The two things that drive the need for safety stock are:
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Demand variability: This refers to the fluctuations in customer demand. If demand is unpredictable and varies greatly, a company may need to keep extra stock on hand to meet this variable demand and avoid stockouts.
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Delays: This could be delays in the supply chain, such as late deliveries from suppliers. If a company experiences frequent or unpredictable delays, they may need to keep safety stock on hand to ensure they can still meet customer demand in the event of a delay.
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