What term describes the average amount of inventory required to meet customer demand between orders from suppliers?

What term describes the average amount of inventory required to meet customer demand between orders from suppliers?

• A. Pipeline inventory
• B. Cycle stock
• C. Procurement stock
• D. Safety stock

Answer: (B)

Cycle stock is the portion of inventory that is consumed as customer demand occurs between replenishment orders from suppliers. When you place an order, the received quantity serves to cover demand until the next order arrives, so its average level reflects the amount you carry specifically to bridge those replenishment cycles. In steady demand, this cycle stock tends to peak right after an order is received and then deplete toward the next order, with the typical average being roughly half the order quantity. This concept is distinct from safety stock (extra buffer) and pipeline stock (inventory in transit). Therefore, the term that describes the average amount of inventory needed to meet demand between supplier orders is cycle stock.

Cycle stock is the portion of inventory that is consumed as customer demand occurs between replenishment orders from suppliers. When you place an order, the received quantity serves to cover demand until the next order arrives, so its average level reflects the amount you carry specifically to bridge those replenishment cycles. In steady demand, this cycle stock tends to peak right after an order is received and then deplete toward the next order, with the typical average being roughly half the order quantity. This concept is distinct from safety stock (extra buffer) and pipeline stock (inventory in transit). Therefore, the term that describes the average amount of inventory needed to meet demand between supplier orders is cycle stock.