Certified Supply Chain Professional (CSCP) Practice Exam

What does safety stock aim to protect against?

1. Ordered stock levels

2. Fluctuations in demand or supply

3. Discounted purchasing opportunities

4. Production delays

The correct answer is: Fluctuations in demand or supply

Safety stock specifically serves to protect against fluctuations in demand or supply. The primary purpose of maintaining safety stock is to ensure that there is a buffer available to accommodate unexpected increases in customer demand or unforeseen disruptions in supply. These fluctuations can occur for various reasons, such as sudden market trends, supplier delays, or natural disasters that impact production and delivery schedules. The importance of safety stock lies in its ability to prevent stockouts, which can negatively affect customer satisfaction and lead to lost sales. By having this additional inventory on hand, businesses can respond more flexibly to changing market conditions and maintain service levels even when demand or supply does not behave as anticipated. While other options highlight important supply chain concepts, they do not directly relate to the core function of safety stock. For instance, maintaining ordered stock levels is focused on the baseline inventory needed to meet expected demand without accounting for variability. Opportunities for discounted purchasing and addressing production delays are strategic decisions that can influence inventory management but do not specifically pertain to the protective role of safety stock in the context of demand and supply variability.