Which term refers to additional inventory held above the basic pipeline stock to cover forecasted sales increases, promotions, seasonal fluctuations, plant shutdowns, and vacations?

• A. Assemble-2-order
• B. Available inventory
• C. Backflush
• D. Anticipation inventories

Answer: (D)

Anticipation inventories are extra stock kept above the normal pipeline to cover forecasted sales increases, promotions, seasonal fluctuations, plant shutdowns, and vacations. The idea is to smooth demand and production by building up inventory before known peak periods or disruptions, so you can meet higher customer demand without rushing production or facing stockouts. This type of stock is driven by predictable patterns in the forecast, unlike safety stock, which guards against random, uncertain fluctuations. It’s distinct from what’s currently in transit (pipeline) or what’s already on hand and available for immediate use, and it isn’t a production method or an accounting technique—it's a deliberate buildup to handle known peak periods and planned shutdowns.