Safety stock is inventory held to guard against uncertaintyGroup startsTrue or False

Safety stock is indeed inventory held to guard against uncertainty. Therefore, the correct answer is True.

Safety stock acts as a buffer in inventory management to prevent stockouts that can occur due to unpredictable demand or supply chain disruptions. It helps businesses maintain operations smoothly even when there are fluctuations in demand or delays in supply. By holding safety stock, companies can minimize the risk of lost sales and customer dissatisfaction that arise from running out of products. The calculation of safety stock typically considers factors such as average demand, lead time variance, and service level requirements, which are crucial for determining the appropriate amount of buffer inventory needed. Thus, businesses can effectively respond to uncertainties in their operational environment.