Safety stock is used in the situation where neither daily demand nor lead-time is stochastic.
True or False
production and operations management - Ms. Sue, Thursday, July 29, 2010 at 10:33pm
What do you think?
production and operations management - Amy, Thursday, July 29, 2010 at 11:27pm
I think false because safety stock is kept for cases when forecast errors occur (due to changes in daily demand or lead time), which would make daily demand and lead-time stochastic. Is this a logical interpretation?