The safety stock (or buffer stock) is the stock level that limits stock shortages due to unforeseen
events (forecasts not in line with demand, longer than expected supply time, etc…)
Demand variance is the degree to which the demand in a fixed period deviates from the average
demand of the same period.
A reorder point is the unit quantity on hand that triggers the purchase of a predetermined amount of
replenishment inventory.
The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders
from suppliers directly with production schedules.
Reference: CIPS study guide page 84-85
LO 2, AC 2.1
