What is cycle stock?

• A. Inventory in transit between facilities.
• B. Inventory kept as safety stock to cushion against stockouts.
• C. Inventory that varies due to replenishment intervals; not safety or pipeline stock.
• D. Inventory that is obsolete and slated for disposal.

Answer: (C)

Cycle stock is the portion of inventory kept to meet normal demand during the time between replenishment orders. It grows or shrinks based on how much you order and how long it takes for those orders to arrive, so it varies with replenishment intervals. It’s separate from safety stock, which is extra to protect against variability, and from pipeline stock, which is inventory already in transit. So, cycle stock is inventory that fluctuates due to replenishment intervals and is not safety or pipeline stock. For example, ordering a fixed lot to cover a set period means that the on-hand quantity used to meet that period’s demand represents cycle stock.