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Safety Stock

A buffer of extra inventory held to protect against demand or supply variability.

Area
Inventory
Also known as
buffer stock
In this area
44 terms of 257

Safety stock is the cushion of stock you keep above expected demand to avoid stockouts when sales spike or a supplier is late. It absorbs the uncertainty in both demand and lead time.

Set it too low and you risk lost sales; set it too high and you tie up cash and warehouse space. The right level balances service level against carrying cost.

How it is calculated

Safety stock = Z × σ_LT

Z is the service-level factor; σ_LT is the standard deviation of demand over lead time.

See it in AWRA OpsHub

Inventory Balancing & Replenishment

Related terms

Reorder Point

ROP

The stock level that triggers a new purchase or production order.

Lead Time

The total time between placing an order and receiving the goods.

Stockout

Running out of an item so demand cannot be fulfilled.

Economic Order Quantity

EOQ

The order size that minimises the combined cost of ordering and holding stock.

More in Inventory

ABC Analysis Asset Tracking Available to Promise (ATP) Backorder Barcode Carrying Cost Consignment Inventory Cycle Count

Safety Stock is not just a definition here

Inventory runs on this vocabulary every day in AWRA OpsHub — 44 of our 257 glossary terms describe things the platform actually does.

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