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Safety Stock Calculator
Calculate optimal buffer stock levels to prevent stockouts while minimizing carrying costs.
How to Use This Tool
- Enter your average daily demand - the typical units sold or used per day
- Enter demand variability - how much your demand fluctuates (standard deviation)
- Set your lead time - days from placing an order to receiving it
- Choose your service level - how often you want to avoid stockouts (95% is common)
About Safety Stock
Safety stock is extra inventory held to mitigate the risk of stockouts caused by uncertainties in supply and demand. The right level balances the cost of holding extra inventory against the cost of potential stockouts and lost sales.
Formula Used
Safety Stock = Z × σd × √L
Where Z is the service level factor, σd is demand standard deviation, and L is lead time.