What term describes the portion of inventory kept between manufacturing or distribution entities to create independence between processes and decouple supply from usage?

• A. Decoupling inventory
• B. Buffer stock
• C. Safety stock
• D. Pipeline inventory

Answer: (A)

Decoupling inventory is the portion of inventory kept between manufacturing or distribution entities to allow independence between processes and decouple supply from usage. By placing a buffer between stages, each process can operate at its own pace and continue even if the previous step slows down or fluctuations occur, which smooths production and protects against stoppages. This is different from inventory in transit (pipeline inventory), which is simply goods moving from one location to another. It’s also distinct from safety stock, which is held to guard against demand or supply volatility at the finished-goods level, and from a general buffer stock term that can refer to buffers used for various purposes. The idea is to provide a controlled gap between processes so that variability in one part of the system doesn’t directly disrupt the others.