MANAGEMENT

Detailed explanation-1: -Buffer stock is an additionally stored volume of goods which is kept to meet any sudden future demand or supply fluctuations. It is a backup stock, which retains some kind of buffer to protect in case of uncertain future. Buffer stock is kept as an extra backup to prepare for any uncertain business situations.

Detailed explanation-2: -A buffer stock is a system or scheme which buys and stores stocks at times of good harvests to prevent prices falling below a target range (or price level), and releases stocks during bad harvests to prevent prices rising above a target range (or price level).

Detailed explanation-3: -Importance. The importance of the buffer stock system is realized during the fixation of procurement targets. Buffer stocks are excess stocks of food items stored in the godowns. This system helps evenly distribute food items to various parts of a country.

Detailed explanation-4: -Safety stock inventory, sometimes called buffer stock, is the level of extra stock that is maintained to mitigate risk of run-out for raw materials or finished goods due to uncertainties in supply or demand.

Detailed explanation-5: -Safety stock (also called buffer stock) is a term used by supply chain managers to describe a level of extra stock that is maintained to mitigate risk of stock-outs (shortfall in raw material or packaging) due to uncertainties in supply and demand.