Inventory Buffer Stock

Inventory buffer stock is extra products that a brand keeps on hand to meet customer demand in the case of a sales surge.

What Is Inventory Buffer Stock?

Stocking out of a product can be detrimental to a brand's bottom line — especially when customer demand is high. Many brands hold inventory buffer stock to ensure that doesn't happen. Buffer stock is extra products that the brand stores to ensure they're able to meet fluctuations in customer demand. While this kind of stock can be helpful during demand surges, it can also be costly, as the brand must pay inventory carrying costs for all items that sit on shelves or in warehouses. That's why brands must use an inventory management system to optimize their stock volumes and forecast future demand. These systems help remove the need for inventory buffer stock by pinpointing demand ebbs and flows and managing inventory accordingly.

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