Which statement defines cycle stock?

Which statement defines cycle stock?

• A. Buffer stock
• B. Inventory a company builds to satisfy its immediate demand
• C. Inventory in transit
• D. Additional inventory beyond cycle and safety stock for future event

Answer: (B)

Cycle stock is the portion of inventory kept specifically to meet normal, ongoing demand within a replenishment cycle. It’s the regular stock you carry to cover what you expect to sell until your next order or production run arrives. That’s why the statement describing inventory built to satisfy immediate, regular demand fits best: it captures the idea of stock that is planned and used up as demand occurs between replenishments. Think of it this way: cycle stock fluctuates with order quantities. If you typically order a batch that covers two weeks of sales, the cycle stock on hand will be enough to satisfy those two weeks of demand. Once a replenishment arrives, cycle stock is restored. This is different from safety stock, which is extra to guard against variability; from in-transit inventory, which is on the move and not yet in the warehouse; and from any additional inventory kept for future events beyond the normal cycle and safety stock.

Cycle stock is the portion of inventory kept specifically to meet normal, ongoing demand within a replenishment cycle. It’s the regular stock you carry to cover what you expect to sell until your next order or production run arrives. That’s why the statement describing inventory built to satisfy immediate, regular demand fits best: it captures the idea of stock that is planned and used up as demand occurs between replenishments.

Think of it this way: cycle stock fluctuates with order quantities. If you typically order a batch that covers two weeks of sales, the cycle stock on hand will be enough to satisfy those two weeks of demand. Once a replenishment arrives, cycle stock is restored. This is different from safety stock, which is extra to guard against variability; from in-transit inventory, which is on the move and not yet in the warehouse; and from any additional inventory kept for future events beyond the normal cycle and safety stock.