Which type of inventory is categorized as "cycle stock"?

Cycle stock is the portion of inventory that is held to meet expected demand during a specific period. This type of inventory is replenished regularly through scheduled orders or production, allowing a business to satisfy customer demand while managing costs effectively.

Cycle stock is distinct from safety stock, which is held as a buffer against uncertainties in supply or demand, and from other forms of inventory that may be kept for different strategic reasons. The nature of cycle stock revolves around the normal replenishment cycle based on sales forecasts and expected needs, ensuring that inventory levels align with market requirements. This allows organizations to balance inventory costs with service levels effectively.

Understanding cycle stock is crucial for efficient inventory management, as it directly relates to how companies plan their resources to maintain operational flow while minimizing excess stock that could become obsolete.