Definition Extra stock held to protect against unexpected demand or delivery delays.
Example (50 units × 10 days) − (40 units × 7 days) gives safety stock of 220 units.
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Why it matters It protects against running out when demand or delivery changes.
Where it is used Inventory planning and supply chain settings.
How to calculate it (Maximum daily usage × maximum lead time) − (average daily usage × average lead time)
Worked example (50 units × 10 days) − (40 units × 7 days) gives safety stock of 220 units.
