Which of the following statements about inventory management is correct?

Question

A. The economic ordering quantity is the quantity at which the total cost of carrying (holding) inventory is minimized.
B. A firm should always order inventory in amounts sufficient to take advantage of quantity discounts.
C. Safety stock is additional inventory that a firm carries to guard against unexpected changes in sales.
D. To most efficiently manage its inventory, a firm should not reorder raw materials until it has no products remaining in inventory.
E. Outsourcing is the practice of arranging for a supplier to deliver raw materials at the time they are needed in the production process.

Answer 1

Answer: C