Safety stock is best described as which of the following?

Safety stock is best described as which of the following?

• A. The buffer maintained to address unexpected demand.
• B. Extra inventory held to protect against demand or supply variability.
• C. A planned promotional stock.
• D. A fixed decimal safety margin.

Answer: (B)

Safety stock is the extra inventory kept to guard against uncertainty in demand and supply. It provides a cushion so that stockouts don’t occur when actual demand or supplier lead times differ from forecasts, helping maintain the desired service level. This makes it a fuller description than just a buffer for unexpected demand, because it explicitly covers variability in both how much is needed and how long replenishment takes. Planned promotional stock is for campaigns and isn’t about uncertainty, and a fixed decimal safety margin isn’t a standard concept in inventory practice.

Safety stock is the extra inventory kept to guard against uncertainty in demand and supply. It provides a cushion so that stockouts don’t occur when actual demand or supplier lead times differ from forecasts, helping maintain the desired service level. This makes it a fuller description than just a buffer for unexpected demand, because it explicitly covers variability in both how much is needed and how long replenishment takes. Planned promotional stock is for campaigns and isn’t about uncertainty, and a fixed decimal safety margin isn’t a standard concept in inventory practice.