GlossaryEN1 min readUpdated: Jun 22, 2026
Inventory Buffer
A production planner books a firm delivery schedule, then deliberately sets stock levels above that baseline – the extra units are the inventory buffer, also called safety stock.
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Source: https://www.investopedia.com/terms/b/buffer-stock.asp
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Logistics concept
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Definition & Explanation
A production planner books a firm delivery schedule, then deliberately sets stock levels above that baseline – the extra units are the inventory buffer, also called safety stock. When actual demand spikes or a supplier shipment arrives late, the buffer absorbs the shortfall and keeps operations running without a stockout. Buffer size is calculated from demand variability, supplier lead-time reliability, and the target service level. Carrying more buffer stock raises warehousing and capital costs; carrying less increases the risk of production stoppages or missed customer orders. Safety stock differs from cycle stock, which covers normal consumption between replenishment cycles, and from reorder point, which simply triggers a new purchase order.
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