The correct answer is "Both A and B."
Here's a breakdown of the concepts mentioned in your options:
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Safety Stock:
- Safety stock is an inventory management technique used to prevent stockouts caused by incorrect forecasting or unforeseen changes in customer demand. It essentially acts as a buffer to ensure that there is sufficient inventory on hand to meet unexpected surges in demand or delays in supply.
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Cross Docking:
- Cross docking is a logistics practice where incoming shipments are directly unloaded from incoming trucks and loaded onto outbound trucks, with little to no storage time in between. This method aims to streamline the shipping process and reduce inventory holding costs, enhancing efficiency and responsiveness to customer demand.
Both definitions accurately describe the concepts of safety stock and cross docking, making "Both A and B" the appropriate choice.