Safety stock is an extra quantity of goods that are stored in the warehouse for emergencies. Safety stock help companies to fulfill their orders in case they ran out of supplies before the latest inventory arrived.
Safety stock help companies to not rely on the supplier for fast shipments or turning down their customers in case of higher product demand. During festivals, companies may run out of stock due to inaccurate market forecasts.
Safety stock also ensures security against the delayed shipments by the supplier due to unforeseen reasons. It also helps companies to survive in the situation where raw material prices may increase, entry of new competitors, increased in product demand, or change in government policies.
Linda Lechner has just been severely chastised for her inventory policy.
Prepare a schedule like that shown in Figure 11.12 for
A newspaper publisher uses roughly 800 feet of baling wire each day
After analyzing the costs of various options for obtaining brackets, Ross
Eakins Enterprises makes model boats, and it is switching to a
A service station uses 1,200 cases of oil a year
Aztec Company expects daily usage of 500 pounds of material Inca,
Marino Company predicts that it will use 25,000 units of
Jill’s Job Shop buys two parts (Tegdiws and Widgets) for
. Given this information: Lead-time demand =
