What could lead to an increase in safety stock?

An increase in safety stock is primarily influenced by a higher order quantity alongside safety stock itself. When both order quantity and safety stock are increased, it allows for better absorption of demand fluctuations and supply chain uncertainties. This action serves as a buffer to accommodate unexpected demand peaks, longer lead times, or supply disruptions.

Increasing the order quantity provides a more substantial baseline inventory, and when combined with appropriately elevated safety stock, it ensures that operations can continue smoothly without interruption. This approach is particularly beneficial in environments where demand can shift rapidly or where supply chain issues are prevalent.

Other options may lead to a decrease in safety stock needs or reflect improvements in supply chain efficiency rather than an increase in safety stock itself. For example, reducing lead time or decreasing variability in demand forecasts typically allows for leaner inventory practices, as less stock is necessary to buffer against uncertainties. A reduction in total line items requested also generally aligns with a more efficient inventory strategy that could reduce the need for higher safety stock levels.