Safety Stock Calculator
Safety Stock Calculator
Component |
Description |
Lead Time Demand |
The demand for a product during its lead time. |
Standard Deviation of Demand |
The variability in demand during the lead time. |
Service Level |
The desired probability of not facing a stockout during the lead time. |
Safety Stock |
The additional quantity of a product kept in inventory to reduce the risk of a stockout. |
Formula |
Safety Stock = Z × σLT, where Z is the service level factor and σLT is the standard deviation of lead time demand. |
Purpose |
Used to ensure adequate inventory levels to meet customer demand and avoid stockouts. |