Question

The most common solution to supply chain uncertainties is to build inventories or __________ as insurance.

Answer 1

Answer: a)Safety stock

Explanation: Safety stock is the collection of item or goods of any particular company so that they do not face out of stock situation.This stocks helps in the situation when the sale of goods are more than expected rate and additional stock is not present to be used in the uncertain situation.

Safety stock acts as the insurance because of its extra inventory in the uncertain situation.Other options are incorrect because stock-out means the stock of items getting finished, continuous replenishment is notification about the sales on daily basis and restocking is the refilling of the items in stock upon the request when the goods get out of stock.Thus the correct option is option(a)