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An organization sells a product for which demand is uncertain. Management would like to ensure that there is sufficient inventory on hand during periods of high demand so that it does not lose sales (and customers). To do so, the organization should:
A. Keep a safety stock.
B. Use a just-in-time inventory system.
C. Employ a materials requirements planning system.
D. Keep a master production schedule.
Answer: A
Explanation:
Safety stock is inventory maintained to reduce the number of stock outs resulting from higher-than-expected demand during lead time. Maintaining a safety stock avoids the costs of stock outs, e.g., lost sales and customer dissatisfaction.

NEW QUESTION: 2
Which of the following is a popular replacement for halon gas?
A. Ozone
B. SO2
C. FM-200
D. CO2
Answer: C

NEW QUESTION: 3
Find the value of m or b1:
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B. 0.25
C. 0.75
D. 1.22
Answer: C

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