Buffer Stock Law and Legal Definition

Buffer Stock is the reserve units of a good that are utilized to moderate price fluctuations. It is a stock quantity, which is based on the normal average expected consumption during the lead-time to replenish depleted stock. Buffer Stock is also referred to as stock reserve. However, safety stock or security stock ensures that the item is available up to the pre-defined required service level, even when the re-ordered material arrives later than expected, or the fluctuations in demand during the lead-time cause the demand to be larger then expected.