safety stock

(logistics) (a) (technical) The average volume of inventory on hand when a new order is received. (b) (general) Raw materials, component parts or finished goods maintained in inventory specifically in anticipation of unforeseen shortages of materials or component parts or unusual demand for finished goods. The volume of safety stock held in inventory is determined by such factors as instability in supplier markets, supplier production time, order fulfillment and delivery time from the point of origin and the potential for unusual increases in demand for finished product. See buffer stock.

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