Which inventory type is intended to manage fluctuations in customer demand?

The inventory type designed specifically to manage fluctuations in customer demand is safety inventory. Safety inventory acts as a buffer against uncertainty in demand and supply, ensuring that a company can meet unexpected spikes in customer orders without running out of stock. This is particularly important in environments where demand is unpredictable and can vary widely, making it crucial for maintaining customer satisfaction and service levels.

While cycle inventory is concerned with managing inventory levels based on regular ordering patterns, and anticipation inventory is aimed at preparing for expected changes in demand, safety inventory is fundamentally about safeguarding against the unforeseen. Event inventory typically refers to stock created for specific occasions or promotions but does not specifically address fluctuations in ongoing demand.

Thus, safety inventory plays a critical role in mitigating risks associated with demand variability, which is why it is recognized as the correct answer in the context of managing fluctuations in customer demand.