Question 1
The optimal safety stock level is the quantity of safety stock that minimizes the sum of the annual relevant ________.
◦ stockout costs and carrying costs
◦ ordering costs and carrying costs
◦ ordering costs and stockout costs
◦ ordering costs and purchasing costs
Question 2
The purchase-order lead time is the ________.
◦ time between placing an order and its delivery
◦ time between receiving a customer order and producing the products
◦ time between receiving a customer order and delivering the items
◦ time required to correct errors in the defective products