Safety Stock Inventory Calculation
Safety stock inventory, sometimes called buffer stock, is the level of extra stock that is maintained to mitigate the risk of run-out for raw materials or finished goods due to uncertainties in supply or demand.
Reasons why you should carry safety stock:
1. Protect against unforseen variation in supply
2. Compensate for forecast inaccuracies.
3. Prevent disruptions in manufacturing or deliveries
4. Avoid stock-outs to keep customer service and satisfaction levels high.
Use this simple calculator on the left to discover how much safety stock you should be carrying.
The information which you calculate from the Safety Stock Calculator is intended for use by you as a guide only, and has no legal effects.