Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:
Correct Answer: D
Improved information throughout the supply chain can lead to the de-emphasis of safety stock for the following reasons:
* Enhanced Visibility: Improved information systems provide better visibility into inventory levels, demand forecasts, and supply chain activities, enabling more accurate planning and inventory management.
* Accurate Forecasting: With better data and analytics, companies can make more accurate demand forecasts, reducing the need for excess safety stock to cover unexpected demand fluctuations.
* Real-time Data: Real-time information allows for quicker responses to changes in demand or supply conditions, minimizing the reliance on safety stock as a buffer.
* Collaborative Planning: Sharing information with supply chain partners facilitates collaborative planning and replenishment strategies, reducing the uncertainty that safety stock is meant to mitigate.
References:
* Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.
Pearson.
* Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2008). Designing and Managing the Supply Chain.
McGraw-Hill.