A statistical safety stock calculation would be appropriate for:
A.
components used in multiple end items.
B.
new products at time of introduction.
C.
end items with stable demand.
D.
supply-constrained raw materials.
The Answer Is:
C
This question includes an explanation.
Explanation:
A statistical safety stock calculation is a method to determine the optimal amount of safety stock based on the demand variability, the lead time variability, and the desired service level. A statistical safety stock calculation would be appropriate for end items with stable demand, because these items have a predictable demand pattern and a low coefficient of variation. For items with unstable or unpredictable demand, such as components used in multiple end items, new products at time of introduction, or supply-constrained raw materials, a statistical safety stock calculation may not be accurate or reliable, and other methods such as judgmental or simulation-based approaches may be preferred. References: CPIM Part 2 Exam Content Manual, Domain 5: Plan and Manage Inventory, Section 5.4: Inventory Management Techniques, p. 29.
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