Safety stock
Safety stock is inventory held as a buffer against uncertain demand or replenishment delays.
What to review
- Measure demand variability
- Review supplier lead times
- Consider service needs and holding cost
- Revisit the buffer when conditions change
A simple example
If replenishment normally covers expected demand but a late delivery would stop operations, a separately planned buffer can reduce that exposure. There is no single correct buffer for every item.
In your warehouse
Use stock reports and product reorder settings as inputs to the decision. Forecasting and automatic optimisation require their own validation; a threshold is not a guarantee against stockouts.