A buffer stock is used to manage which of the following scenarios?

A buffer stock is used to manage which of the following scenarios?

• A. Demand variability and lead-time disruptions
• B. Excess demand and supplier overstocking
• C. On-time deliveries with perfect information
• D. Non-variable demand with fixed lead times

Answer: (B)

Buffer stock, or safety stock, is inventory kept to absorb uncertainty in demand and supply. It provides a cushion when actual demand differs from forecast and when replenishment takes longer than planned, helping maintain service levels and prevent stockouts. By having this extra stock, you can continue fulfilling orders during ups and downs in demand or during supplier delays. It is not primarily about handling periods of excess demand and supplier overstocking, which relate to forecasting accuracy and inventory control rather than buffering against uncertainty. If demand were perfectly predictable and lead times fixed, there would be little or no need for buffer stock. Likewise, if there were non-variable demand with fixed lead times, buffering wouldn't be necessary. The intended use of buffer stock is to cope with variability in both demand and lead time.

Buffer stock, or safety stock, is inventory kept to absorb uncertainty in demand and supply. It provides a cushion when actual demand differs from forecast and when replenishment takes longer than planned, helping maintain service levels and prevent stockouts. By having this extra stock, you can continue fulfilling orders during ups and downs in demand or during supplier delays. It is not primarily about handling periods of excess demand and supplier overstocking, which relate to forecasting accuracy and inventory control rather than buffering against uncertainty. If demand were perfectly predictable and lead times fixed, there would be little or no need for buffer stock. Likewise, if there were non-variable demand with fixed lead times, buffering wouldn't be necessary. The intended use of buffer stock is to cope with variability in both demand and lead time.