APICS Certified in Logistics, Transportation and Distribution (CLTD) — Question 85

A firm is deciding to increase the number of warehouses from 4 to 5. If the safety stock level of the product is currently at 500 units, which of the following quantities is an estimate of the revised safety stock levels as a result of increasing the number of warehouses?

Answer options

• A. 250
• B. 450
• C. 560
• D. 660

Correct answer: C

Explanation

The correct answer is C because increasing the number of warehouses typically allows for better distribution of inventory, which often leads to a slight increase in safety stock to account for variability in demand. Options A, B, and D do not accurately reflect the adjustments commonly made when expanding warehouse capacity.