Asked by Christopher Vartanian on Jun 17, 2024

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It is better to carry more safety inventory downstream if

A) inventory is inexpensive to hold and customers are not time sensitive.
B) inventory is expensive to hold and customers are not time sensitive.
C) inventory is inexpensive to hold and customers are time sensitive.
D) inventory is expensive to hold and customers are time sensitive.

Safety Inventory

Additional stock that is kept in reserve to protect against stockouts caused by variability in demand or supply.

Time Sensitive

This term describes situations, operations, or processes that are highly dependent on the duration or timing in which they occur, necessitating prompt or precise scheduling.

Inventory Upstream

Refers to the inventory held by suppliers and manufacturers before it is distributed down the supply chain to the end consumer.

  • Understand the role and importance of safety inventory in the supply chain.
  • Explain the relationship between inventory placement in the supply chain and inventory costs.
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Verified Answer

AB
Aaron BrownJun 23, 2024
Final Answer :
C
Explanation :
Holding more safety inventory downstream is more beneficial when inventory is inexpensive to hold and customers are time sensitive. This approach ensures that products are readily available to meet customer demand promptly, without incurring high holding costs.