Question:medium

Which of the following relationships hold correct for the safety stock of inventory?

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Think of safety stock like an umbrella: the more erratic and unpredictable the weather forecast (high uncertainty), the larger the umbrella you need to carry (higher safety stock) to avoid getting wet (stockout)!

Updated On: Jul 9, 2026

The greater the risk of running out of stock, the small the safety of stock
The larger the opportunity cost of the funds invested inventory, the larger the safety stock
The greater the uncertainty associated with forecasted demand, the higher the safety stock
None of the options are correct

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The Correct Option is C

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