Question

Extra units that are held in inventory to reduce stockouts are called

Answer 1

Answer:

Safety Stock

Explanation:

Safety point is the right name for inventory that is held, to reduce chance of stock out.

Answer 2

These units are known as safety stock.

• The stock is an additional amount of a commodity that is with held in the warehouse to avoid running out of stock.
• It acts as a buffer against demand changes.
• A sufficient supply of this specific stock allows corporate activities to run smoothly and as planned.
• Inventory velocity, present and future demand, sales volume, and supplier lead times are all elements that influence the appropriate amount.