What describes strategic stock?

• A. Additional inventory beyond cycle and safety stock, generally used for a very specific purpose or future event or defined period of time
• B. Pipeline inventory
• C. Base stock level system
• D. Obsolete inventory

Answer: (A)

Strategic stock is extra inventory beyond the regular replenishment (cycle stock) and the buffer against variability (safety stock) that is kept for a specific future purpose or event. This reserve is planned to meet a known upcoming need, such as a large order, a promotional campaign, a key customer commitment, or to handle a potential supply disruption, all within a defined time frame. It’s about positioning inventory to support strategic goals and responsiveness, not just routine handling.

Pipeline inventory refers to goods that are already in transit; a base stock level system is an inventory control policy that maintains a fixed stock level; obsolete inventory is stock that can no longer be sold.