Which term describes buffer stock used to cushion against demand fluctuations?

Which term describes buffer stock used to cushion against demand fluctuations?

• A. Cycle stock
• B. Safety stock
• C. Strategic stock
• D. Pipeline inventory

Answer: (B)

The main idea here is safety stock—the extra inventory kept beyond what is expected to meet normal demand and protect against variability in demand or supplier lead times. This buffer helps prevent stockouts when actual demand turns out higher than forecast or when replenishment takes longer than planned, preserving service levels and customer satisfaction.

Safety stock is specifically designed for uncertainty, whereas other stock types serve different purposes. Cycle stock covers what’s needed to meet regular demand during the replenishment cycle, not to absorb surprises. Pipeline inventory refers to goods already in transit, not additional buffering. Strategic stock, while used in some contexts for long-term or crisis aims, isn’t the standard term for buffering against everyday demand fluctuations.