Which type of stock helps retailers manage unexpected demand surges?

The correct answer is safety stock, which is a crucial concept in inventory management for retailers facing unexpected fluctuations in demand. Safety stock acts as a buffer against uncertainties in supply and demand. Retailers often experience variations in customer purchasing behavior due to seasonal trends, promotions, or unforeseen events. By maintaining safety stock, retailers ensure that they have enough inventory on hand to meet these sudden surges in demand without running out of stock. This helps in protecting the business from lost sales, customer dissatisfaction, and the potential impact on overall profitability.

In contrast, shelf life refers to the period during which a product remains saleable, but it does not specifically address demand fluctuations. Total inventory or retail inventory encompasses all stock items but does not differentiate between types of stock that support the management of unexpected demand. Loyalty programs, while important for customer retention, do not directly influence inventory management or response to demand changes. Therefore, safety stock is the most effective strategy for managing unexpected surges in demand.