Final answer:
The term 'safety stock' refers to the buffer inventory kept on hand by a business to ensure continuous operation through unexpected disruptions or demand spikes.
Step-by-step explanation:
The stock leveling term that identifies quantities required to be on hand to permit continuous operation due to minor interruptions or normal replenishment or unpredictable increases in demands is known as safety stock. Safety stock acts as a buffer for a company to ensure that it can keep operating and meet customer demand even when there are unforeseen disruptions in the supply chain or spikes in demand. It's calculated based on historical demand and supply variability and is a crucial element in inventory management for maintaining service levels while minimizing the risks of stockouts.