TLMT 353 Assignment 1 Spare Parts and Safety Stock (American Public University)

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Inventory management is a difficult task for any supply chain. Customers are difficult to predict. At times, they cannot get enough of a product, and other times they stop buying a product. Either of these scenarios can leave a company with more inventory than needed, or they can run out. Companies do attempt to forecast their need for a product, but often times the forecasts are inaccurate (Simchi-Levi, 2007). One way to prevent outs is to keep a safety stock supply.