What Is a Buffer Stock?

It is used to avoid the expected increase in demand or the imbalance between production stages. The amount of inventory required above average demand can be referred to as buffer inventory.

Buffer stock

Right!

It is used to avoid the expected increase in demand or the imbalance between production stages. Above average demand

Is implemented by the implementing agency of the commodity agreement.

It is used to avoid the expected increase in demand or the imbalance between production stages. Above average demand

First, determine the maximum price, middle price, and minimum price of the product;

Second, when the market price rises to the maximum limit price, sell the physical object to maintain the price below the maximum limit price;

Third, when the market price falls to the minimum price, use cash to buy on the market to keep the price above the minimum price.

Such as: the price of natural rubber

Highest price sell off inventory

Middle price Do not use buffer stock

Lowest price Cash purchase

Conditions to use buffered inventory to stabilize prices: a large amount of funds and inventory.

The buffer inventory regulations are: International Tin Agreement, International Natural Rubber.