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Supply Chain Management Professional (SCMP) · Question

Which type of inventory acts as a buffer against fluctuations in demand or supply?

Safety stock is held to cover unexpected variations in demand or lead time, preventing stockouts.

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Question: Which type of inventory acts as a buffer against fluctuations in demand or supply?

Answer options:

  • Cycle stock
  • Speculative stock ✅ Safety stock
  • Transit stock

Correct answer: Safety stock

Explanation: Safety stock is held to cover unexpected variations in demand or lead time, preventing stockouts.

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