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Material A has high forecast accuracy (>95%) and high demand variation (Sigma = 50% of average) while Material B has low demand variation (Sigma =
Material A has high forecast accuracy (>95%) and high demand variation (Sigma = 50% of average) while Material B has low demand variation (Sigma = 25% of average) but also low forecast accuracy (50%). The average historical demand for the last 12 months for both materials is the same. The supply leadtime for the two materials is the same and supply is 100% reliable. Which of these statements is correct? Question 19 Answer a. Both materials will have the same safety stocks. b. Both materials will have zero safety stock since supply is 100% reliable. c. Material A will likely have a lower safety stock than material B. d. Material A will likely have higher safety stock than material B
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