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Chapter 4: Q10DQ. (page 579)

Should safety stock be necessary for an MRP system with dependent demand? If so, why? If not, why do firms carry it anyway?

Short Answer

Expert verified

Safety stocks are not compulsory in an MRP system with dependent demand.

Step by step solution

01

Safety stock

Safety stockis also known as buffer stock. It is a stock that returns all the unreliability in supply and demand or the minimum quantity of inventory that the organization keeps with them.

02

Safety stocks are not necessary for the MRP system.

Safety stocks are not important in the MRP system with dependent demand because the manager oversees all the quantity of usage. The firm carries it because it helps meet the changes done by customers' independent demand.

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