What term is used for excess inventory that is maintained in case of increased customer demand?

The term used for excess inventory that is maintained in case of increased customer demand is "Safety Stock." Safety stock acts as a buffer to account for uncertainty in demand or supply chain disruptions. Businesses keep safety stock to avoid stockouts during unexpected surges in customer orders. This strategy helps ensure that customer needs can still be met without delay, even if there are fluctuations in demand or issues in replenishing inventory.

On-hand inventory refers to the amount of inventory currently available for sale and doesn't necessarily include the excess held specifically for unexpected demand increases. Shelf life pertains to the duration that a product can remain suitable for use or sale, rather than a strategy for managing inventory levels. A loyalty program is a marketing strategy designed to encourage repeat business from customers, which does not relate to inventory management practices.