Asked by Wahidah Mat Nasir on Jun 11, 2024
Verified
A distributor should decide his safety inventory levels based on
A) the level of safety inventory carried by all retailers supplied by him.
B) the level of safety inventory carried by other distributors.
C) the level of cycle inventory carried by manufacturers supplying him.
D) the level of cycle inventory carried by all retailers supplied by him.
Safety Inventory Levels
Quantities of stock kept on hand to protect against variability in demand or supply, ensuring product availability.
Cycle Inventory
The portion of inventory available due to the replenishment process, reflecting the quantity of goods that cycle through the supply chain.
Retailers
Businesses that sell products directly to consumers through various channels, including physical stores and online platforms.
- Investigate how the safety inventories of distributors and retailers influence the supply chain dynamics.
Verified Answer
SA
Shahzaib AsherJun 14, 2024
Final Answer :
A
Explanation :
The level of safety inventory carried by all retailers supplied by the distributor is a critical factor in deciding his safety inventory levels. This is because the distributor needs to ensure they have enough inventory to meet the demands of the retailers, especially during times of uncertainty or supply chain disruptions. The safety inventory levels of other distributors, the cycle inventory of manufacturers, or the cycle inventory of retailers do not directly influence a distributor's decision on safety inventory levels as much as the safety inventory needs of the retailers they supply.
Learning Objectives
- Investigate how the safety inventories of distributors and retailers influence the supply chain dynamics.