Question

whatwhat is Reserve Stock. Are reserve stock and Buffer stock same?? is Reserve Stock. Are reserve stock and Buffer stock same??

Answer 1

Answer:

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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