Book a demo

How to calculate safety stock for inventory management

Determining appropriate inventory levels is one of the most important and most challenging tasks operations managers face. If you carry too much inventory, you tie up money in working capital; if you don’t carry enough inventory, you face stock outs and unhappy customers.

Safety (or buffer) stock is the extra layer of inventory that prevents stock outs and back orders.

This eGuide goes through different methods for calculating safety stock and strategies to find the right balance between inventory costs and customer service levels. You’ll discover:

  • The basics of safety stock management
  • Why companies should carry safety stock
  • Methods of calculating safety stock, including calculation equations and examples

Looking for more supply chain inspiration & advice?

We’ve got you covered!

Brown boxes with small white labels in the top left corner all stacked on top of each other so you can only see boxes safety stock why safety stock is important
Blog

4 reasons for carrying safety stock inventory

You’re a manufacturer who is working on an order when you realize that you’re out of a necessary component due…

Shelf rack full of cartons at logistics warehouse with more boxes piled in front the causes of excess inventory
Blog

8 causes of excess inventory and carrying too much stock

8 reasons why you’re carrying too much inventory Below we’re going to investigate why businesses end up with too much…

Close up of an abacus with different coloured beads on each metal line - dark green light green, yellow, orange, pink and purple - on a wooden table to show how to calculate safety stock
Blog

How to calculate safety stock: three different calculations

Determining appropriate levels of stock across a business can be very challenging. If you carry too much inventory, you risk…