What is Buffer stock ?
Answers
BUFFER STOCK. ------
Buffer stock is the stock of food grains. For example: Rice, wheat, pulses etc.
→Its a reserve of a commodity that is used to offset price fluctuations and unforeseen emergencies.
→Government has created buffer stock to distribute these food grains in deficit areas and for poor peoples or a poor village by lower price less than the market price.
→We can calculate the buffer stock by Multiply your maximum daily usage by your maximum lead time in days.
→A buffer stock is needed to maintained in order to ensure food security.
Answer: -
A buffer stock is a system or scheme which buys and stores stocks at times of good harvests to prevent prices falling below a target range (or price level), and releases stocks during bad harvests to prevent prices rising above a target range (or price level).