What is Safety stock?

Safety stock is extra inventory kept to cover demand spikes and supplier delays: Z × daily sales variation × √lead time.

Example

At a 95% service level, sales varying by 5 units a day and a 16-day lead time need about 33 units of safety stock.

Why it matters

Stockouts cost sales and, on marketplaces, can hurt rankings that take weeks to recover.

Calculate it: Reorder Point Calculator

Safety stock and when to reorder

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Flashcard

Question

What is safety stock?

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Answer

Safety stock is extra inventory kept to cover demand spikes and supplier delays: Z × daily sales variation × √lead time.

Read more in our guide: Safety Stock and Reorder Point: When to Reorder Inventory