Situation cost of goods sold inventory increase (decrease) accounts payable increase (decrease) cash paid to suppliers 1 65.0 0 0 65.0 2 65.0 1.6 0 3 65.0 (1.6) 0 4 65.0 0 4.9 5 65.0 0 (4.9) 6 65.0 1.6 4.9 7 65.0 1.6 (4.9) 8 65.0 (1.6) (4.9) 9 65.0 (1.6) 4.9

The purpose of safety stock is to: a. eliminate the possibility of a stockout. b. control the likelihood of a stockout due to variable demand and/or lead time. c. eliminate the likelihood of a stockout due to erroneous inventory tally. d. protect the firm from a sudden decrease in demand. e. replace failed units with good ones.