OPS 571 Week 3 DQ 1in Business (Education) by nerdythetutor
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Week 3 Discussion Question 1
What is a safety stock and when should it be used? How have safety stocks been used in a global organization with which you are familiar? Were they relied upon appropriately?
Safety stock as the name suggest is the stock level till which the dead stock or stock out situation will not arise (probable figure based on past data maintained in master).
As such this figure is not stock, it is cut-off figure maintained in master which is used for Planning and once the stock level dips below this value, you can configure system to generate PR, orders automatically. Safety Stock is the quantity of stock held to satisfy unexpectedly high requirements in the stocking-up period.
The purpose of the safety stock is to prevent a material shortage from occurring. In order to...