Certified Supply Chain Professional (CSCP) Practice Exam

What is cycle stock?

1. Inventory that is always stored in excess

2. Stock that is replenished periodically

3. Excess stock to cover short-term disruptions

4. Inventory specifically reserved for promotions

The correct answer is: Stock that is replenished periodically

Cycle stock refers to the portion of inventory that is replenished periodically based on expected demand for a given period. This type of inventory is essential for managing efficient operations within the supply chain. Cycle stock is typically aligned with the demand and consumption patterns of the business, allowing organizations to meet their regular sales requirements without disruptions. It is distinct from safety stock, which is held as a buffer against variability in demand or supply. In this context, periodic replenishment ensures that sufficient goods are available to meet customer orders while minimizing holding costs associated with excess inventory. By managing cycle stock effectively, companies can optimize their inventory levels and enhance overall supply chain performance, aligning inventory with sales cycles and demand forecasts. This approach helps maintain a balance between having enough stock to meet customer needs and avoiding the costs associated with overstocking.