ECONOMICS

Detailed explanation-1: -Buffer stock refers to a reserve of a commodity that is used to offset price fluctuations and unforeseen emergencies. It is generally maintained for essential commodities and necessities like food grains, pulses etc.

Detailed explanation-2: -A buffer acts as a cushion to absorb the impact of potential harm. For ecommerce businesses, having a buffer in inventory levels helps prevent shortages and delays in the retail fulfillment process. But ordering too much inventory can quickly cut into profit margins and increase holding costs.

Detailed explanation-3: -In other words, a minimum stock level is a minimum quantity of a particular item of material that must be kept at all times. The fixing of this level acts as a safety measure. For this reason, the minimum stock level is commonly known as safety stock or buffer stock.

Detailed explanation-4: -What is Buffer Stock? Buffer stock is an excess amount of raw materials kept on hand to guard against any unplanned inventory shortages leading into the production process.