Author Question: All of the following are reasons why a company might carry a safety stock except: (Read 109 times)

bio_gurl · **on:** Mar 6, 2021

Question 1

The only product of a company has an annual demand of 14,000 units. The cost of placing an order is $70 and the cost of carrying one unit in inventory for one year is $20.

Required:
Determine the economic order quantity.

Question 2

All of the following are reasons why a company might carry a safety stock except:
◦ a buffer against unexpected increases in demand
◦ a contingency against the uncertainty about lead time
◦ a strategy to lower the carrying cost of inventory
◦ a way of softening the impact of sudden unavailability of stock from suppliers

apple · **Reply #1 on:** Mar 6, 2021

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