Answer: Choosing the level of safety stock that assures a given service level.
Step-by-step explanation:
Safety Stock provides a buffer against stockouts, ensuring that service or production continues if there is a problem with inventory supply. Such problems can vary from price fluctuations to a supplier's inability to fill an order.
The goal of safety stock is not to totally eliminate the risk of stockout as this would be too expensive and impossible in some industries such as hospitality where inventory has a short shelf life.
While safety stock may reduce the stockout cost, it is not the primary consideration in determining the level of safety stock.
