Assume a continuous review inventory control system

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Assume a continuous review (Q) inventory control system. What should be the effect of the following change on safety stock (assuming that they adjust their order practices accordingly)?

If consumer behavior becomes more erratic and fluctuates more from period-to-period than it has in the past, then safety stock should ________

a. increase

b. decrease

c. not be changed (stay the same)

2. Assume a continuous review (Q) inventory control system. What should be the effect of the following change on safety stock (assuming that they adjust their order practices accordingly)?

If an electronic data interchange (EDI) system is implemented to reduce the administrative cost of placing and order, then safety stock should ________

a. increase

b. decrease

c. not be changed (stay the same)

Reference no: EM131673406

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