A statistical safety stock calculation would be appropriate for:

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.

View Answer

Answer: C

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.

Reference: CPIM Part 2 Exam Content Manual, Domain 5: Plan and Manage Inventory, Section 5.4: Inventory Management Techniques, p. 29.