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OPS 571 - Week 3 - DQ 2

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What is a safety stock, and when should it be used? How have safety stocks been used
in your organization? Were they relied upon appropriately?
“Safety stock must therefore be maintained to provide some level of protection against
stockouts. Safety stock can be defined as the amount of inventory carried in addition to the
expected demand” (Chase, Jacobs, & Aquilano, 2006, p. 599). Safety stock should be used
when the expected demand is depleted, but should always be restocked after use for future
orders. In my last organization we had inventory problems. I worked closely with the
logistics manager who controlled inventory. We had thousands of informational packages
that were sent to customers upon request. We didn’t keep the inventory in our location; it
was stored at the printer. Part of the agreement with the printer was an inventory system so
that we could track and order more if necessary. The vendor was known for the poor
inventory system. Many times we thought we had 1000 packages in stock, but would get a
call to find out we only had 100. Ordering was also a contestant ordeal. The marketing
manager liked to have the packets in stock for two reason, we never ran out and it was
cheaper to order in higher quantities. The logistics manager liked to order JIT so that we
didn’t waste any packets at the end of the year when they all had to be redesigned. Luckily,
I was the marketing analyst, so I simply analyzed and never got involved in the inventory
issues.
Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006) Operations management for competitive
advantage (11th ed). New York: McGraw Hill/Irwin

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What is a safety stock, and when should it be used? How have safety stocks been used in your organization? Were they relied upon appropriately? “Safety stock must therefore be maintained to provide some level of protection against stockouts. Safety stock can be defined as the amount of inventor ...
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