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Question 546 - CSCP discussion

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Throughout most of the supply chain, safety stock will be de-emphasized as a result of improved:

A.
cycle stock
Answers
A.
cycle stock
B.
planning.
Answers
B.
planning.
C.
supply.
Answers
C.
supply.
D.
information.
Answers
D.
information.
Suggested answer: D

Explanation:

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.

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.

asked 16/09/2024
Selladurai Ravi
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