When Considering Safety Stock and Its Effect on EOQ, Which

Multiple Choice

When considering safety stock and its effect on EOQ, which of the following statements is false?

A) Safety stock is equal to the potential excess usage of an input.
B) The reorder point is affected by the existence of safety stock.
C) Safety stock decreases inventory holding costs.
D) Safety stock decreases the potential costs caused by inventory shortages.
E) Fluctuations in monthly usage of a material indicate the desirability of a safety stock.