APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 128

Which of the following outcomes is most likely to occur if safety stock is moved from multiple warehouses to a centralized warehouse?

Answer options

• A. Dependent demand will increase.
• B. Customer service levels will increase.
• C. The cost of less-than-truckload (LTL) shipments will decrease.
• D. The aggregate cost of safety stock will decrease.

Correct answer: B

Explanation

Moving safety stock to a centralized location typically enhances inventory management and allows for better stock availability, thereby improving customer service levels. The other options do not accurately represent the effects of centralizing safety stock; dependent demand may not necessarily increase, LTL shipment costs could remain unchanged, and the aggregate cost of safety stock may not decrease without careful management.