Cycle Stock
Definition
The portion of inventory that is consumed and replenished through normal ordering cycles. It is the working stock that satisfies expected demand between replenishments.
In Practice
Cycle stock is the inventory you plan to sell. If you order 600 units every two weeks, your cycle stock averages about 300 units, half the order quantity, cycling between full and nearly empty as demand draws it down. It sits on top of safety stock, which exists only for the unexpected.
The size of cycle stock is a direct function of lot sizing. Larger, less frequent orders mean more cycle stock and higher holding cost; smaller, more frequent orders shrink cycle stock but raise ordering and handling costs. This is exactly the trade-off the economic order quantity formalizes.
Example: a bottler receives 10,000 cases of packaging every 20 days, so average cycle stock is about 5,000 cases. By negotiating twice-weekly deliveries, the planner cuts average cycle stock to roughly 875 cases, freeing warehouse space ahead of the peak season build.
Related Calculators
Related Terms
Extra inventory held beyond expected demand to protect against variability in demand or supply. It acts as a buffer that keeps orders flowing when forecasts miss or deliveries run late.
Economic Order QuantityThe order size that minimizes the combined cost of ordering and holding inventory. EOQ balances the fixed cost of placing orders against the cost of carrying stock.
ReplenishmentThe process of restocking inventory to meet ongoing demand, whether by purchasing from suppliers, transferring between locations, or triggering production. It is the execution engine that keeps stock policies real.
Pipeline InventoryInventory that has been ordered or shipped but has not yet arrived at its destination, such as goods in transit between a supplier and a warehouse. It is owned but not yet available to sell.