Glossary

Safety Stock

Tags: Glossary

The extra inventory held to account for uncertainties such as demand variability or supply chain disruptions.

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What is a Safety Stock?

Safety stock is a level of inventory that is maintained above the minimum required level to ensure that there is enough inventory available to meet unexpected demand or supply chain disruptions. Safety stock is used to protect against stockouts, which can result in lost sales and dissatisfied customers. The level of safety stock required depends on factors such as lead time, demand variability, and service level targets. 

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