Increasing flexibility to meet unexpected demand requires a company to have both safety stock and reserve capacity. Safety stock is extra inventory that is held on hand to buffer against unexpected fluctuations in demand.
B. increase safety stock and maintain reserve capacity. To increase flexibility in meeting unexpected demand, a company should increase safety stock and maintain reserve capacity. Increasing safety stock helps buffer against fluctuations in demand, ensuring there is enough inventory to meet customer needs even when demand exceeds forecasts. Maintaining reserve capacity allows the company to ramp up production quickly in response to unexpected increases in demand without straining its production capabilities. Both of these strategies contribute to greater flexibility and responsiveness to changes in market conditions.
In this case the answer is C. Decrease safety stock and increase reserve capacity. This way inventory can be controlled , obsolesces can be avoided.
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