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The length of the lead time directly impacts the amount of safety stock required to mitigate the risk of stockouts. Longer lead times typically necessitate higher safety stock levels, as there is a greater uncertainty regarding demand during the waiting period for replenishment. This helps ensure that there is enough inventory available to meet customer needs while accounting for potential fluctuations in demand or delays in supply. Conversely, shorter lead times can reduce the required safety stock, as inventory can be replenished more quickly in response to changes in demand.

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3mo ago

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