Question

Sum of buffer stock reserve stock and safety stock is equal to

Answer 1

There is no difference between Safety stock and Buffer Stock

Safety/Buffer stock is excess inventory that acts as a buffer between forecasted and actual demand levels. This inventory is maintained so that a company has sufficient units on hand to meet unexpected customer and production demand.

The safety stock formula is as follows:

(Maximum daily usage - Average daily usage) x Lead time = Safety stock

Safety stock does not just involve finished goods; it can also be applied to raw materials, to guard against delays in the delivery of materials from suppliers.

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Answer 2

Answer:

A safety stock refers to inventories held by a company as a buffer/reserve against any increase is demand during the work-order lead time and/or delay in receipt/production of inventories.

Explanation:

There is no difference between Safety stock and Buffer Stock

• Safety/Buffer stock is excess inventory that acts as a buffer between forecasted and actual demand levels. This inventory is maintained so that a company has sufficient units on hand to meet unexpected customer and production demand.

The safety stock formula is as follows:

• (Maximum daily usage - Average daily usage) x Lead time = Safety stock
• Safety stock does not just involve finished goods; it can also be applied to raw materials, to guard against delays in the delivery of materials from suppliers.
• Safety and limit is the limit that must not be less than, the stock of a particular item in normal circumstances, and called this level the real minimum and this represents a reduction reserve quantity which established reserves to cope with the changing circumstances and uncertain or emergency
• And it can be calculated explained below:
• Real minimum = maximum inventory - economic quantity to buy
• Minimum = true level of demand re - supply amount
• Minimum real = Minimum theoretical + or the amount of emergency reserves
• The maximum amount of emergency stocks can keep inventory from a single class. And any increase this limit is an increase in inventory. The objective of establishing the upper limit is to ensure that disabled the money in the store varieties may not be used in a timely manner, and the upper limit of the reserves calculated according to the following equation: