1. To cater for demand variations
2. Seasonal variations and fluctuations
3. To prevent out-of-stock and provide better customer services
4. To cater for supply variations
5. Volume discounts/Economic Order Quantity
6. Supply lead time variations
7. Purchase price fluctuations
8. To ensure better and smoothly production operations
9. Plant maintenance
10. Potential operation interruption due to electricity, water, gas supply outage