Question

What term reflects the quantity that must be on hand to permit continuous operation during minor interruptions of normal replenishment?

a. Buffer Stock
b. Lead Time Demand
c. Maximum Stock Level
d. Minimum Stock Level

Answer 1

Answer: The term that reflects the quantity that must be on hand to permit continuous operation during minor interruptions of normal replenishment is:

a. Buffer Stock

Buffer stock refers to the quantity of inventory or stock that is held to protect against uncertainties, such as unexpected increases in demand or delays in replenishment. It acts as a cushion or buffer to ensure uninterrupted operations during minor disruptions.

By having buffer stock in place, a company can continue its operations smoothly even when there are temporary interruptions in the replenishment process. It helps to mitigate the risk of stockouts and ensures that there is always an adequate quantity available to meet customer demand.

Therefore, in the context of the question, option a. Buffer Stock is the term that reflects the quantity needed to allow continuous operation during minor interruptions.

Step-by-step explanation:

Answer 2

Buffer Stock is the term that reflects the quantity that must be on hand to permit continuous operation during minor interruptions of normal replenishment.

Step-by-step explanation:

The term that reflects the quantity that must be on hand to permit continuous operation during minor interruptions of normal replenishment is Buffer Stock.

Buffer Stock is the extra inventory kept on hand to account for variability in demand and lead time, ensuring that operations can continue without disruption. It acts as a buffer against uncertainties in supply and demand.

For example, suppose a company regularly orders a certain item from a supplier, but the supplier occasionally experiences delays in delivery. To avoid running out of stock during these delays, the company maintains a buffer stock of that item.