Certified Supply Chain Professional (CSCP) Practice Exam

What is the primary role of buffer inventory?

1. To minimize total inventory costs

2. To keep production throughput steady

3. To provide discount purchasing opportunities

4. To enhance customer satisfaction

The correct answer is: To keep production throughput steady

Buffer inventory plays a crucial role in maintaining consistency in production processes, especially in environments that face variability in demand or supply chain disruptions. By holding a buffer of inventory, organizations can ensure that a steady flow of materials is available for production, which helps to compensate for unexpected fluctuations that might occur in the supply network. This availability helps avoid downtime in production due to shortages, allowing for a more reliable schedule and the capability to meet customer orders consistently. While minimizing total inventory costs and providing discount purchasing opportunities can be related benefits of inventory management, they are not the primary function of buffer inventory. Instead, the focus of buffer inventory is on stabilizing the production process and ensuring throughput remains steady, enabling businesses to respond effectively to changing conditions in the supply chain. Enhancing customer satisfaction is also an outcome of efficient inventory management but is not the core function defining buffer inventory specifically. Thus, the role of buffer inventory aligns with supporting steady production and throughput above other considerations.