Safety Stock Calculator
Safety stock is an inventory buffer that absorbs demand fluctuations and delivery delays. It sits below the reorder point and prevents shortages when consumption runs higher than planned or a delivery arrives later.
Three methods are available: a simple daily formula, the rule-of-thumb formula, and the more precise average-maximum method.
Safety stock
What does the result mean?
The calculated safety stock is your minimum buffer. If your stock falls below this value, the risk of a shortage rises. The reorder point above it is the point at which you should reorder.
For statistical precision, the standard deviation of consumption is required. These formulas are approximations.
Formulas
Simple
SS = daily consumption x safety days
Quick daily buffer. Ideal for standard parts with stable consumption.
Rule of Thumb
SS = (daily consumption x lead time) / 3
Widely used rule of thumb. Not an official standard, but practical and without statistics.
Average-Maximum
SS = (max. consumption x max. lead time) - (avg. consumption x avg. lead time)
Accounts for peak loads and delivery delays. Requires empirical values.
Example: M8 screws
- Average daily consumption:15 units
- Replenishment lead time (RLT):10 days
(15 x 10) / 3 = 50
50 units
Safety stock
Frequently Asked Questions
Sources and further reading
Sources
- Noche, B. (2015): Bestandsplanung. Vorlesungsskript, Universität Duisburg-Essen, Fachgebiet Transportsysteme und -logistik.
- Tempelmeier, H. (2018): Bestandsmanagement in Supply Chains. 4. Auflage. Books on Demand, Norderstedt. ISBN 978-3-7460-2771-5.
Next step
You now know how much buffer you need. Now see what your inventory really costs you each month.
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