Certified Materials and Resource Professional Practice

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Question: 1 / 400

If the order quantity becomes greater or the safety stock is higher, what happens to the inventory?

The inventory will remain the same

The inventory will be larger

When the order quantity increases or there is an increase in safety stock, the overall inventory level will indeed become larger. This is because both of these factors directly contribute to the total amount of stock held.

Increasing the order quantity means that more product is being requested at one time, resulting in a larger addition to existing inventory. Similarly, having higher safety stock means that more buffer stock is being maintained to protect against uncertainties in supply and demand. This additional safety stock acts as a cushion, ensuring that there is enough product available during fluctuations, thereby increasing the total inventory level.

Overall, both an increase in order quantity and safety stock lead to a direct increase in inventory levels, which is why this option is the most appropriate.

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The inventory will be smaller

The inventory will fluctuate unpredictably

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