Explain buffer stock and activities related to creation for buffer stock.

1 answer:

5 0

Buffer stock is also known as safety stock. A buffer stock is an extra stock that would be used if ever there was any shortfall and is seen as an insurance stock. It can also change with the supply and demand of a certain product. To use a safety stock, someone working with it needs to use a material requirements planning worksheet, so that they can calculate how much they can supply of a certain product, without using the safety stock. It is always important for a company to balance their safety stock or buffer stock with the product they are selling, as it is important to know how much safety stock is necessary and how much safety stock is necessary for that specific product in relation to other products.

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