Safety Stock
Also known as: buffer stock
Extra inventory held as a buffer against demand spikes and supplier delays so you do not run out.
Safety stock is the extra quantity of a product you deliberately keep on hand beyond your expected demand. It is a buffer that absorbs the two things you cannot perfectly predict: how fast a product will sell, and how long a supplier will take to restock it.
Hold too little and you risk stockouts, lost sales, and disappointed customers. Hold too much and you tie up cash and warehouse space in inventory that is not moving. The right level depends on demand variability, supplier lead time, and the service level you want to guarantee.
Safety stock is usually calculated from the variability of demand during the replenishment lead time and a service-level factor. It works hand in hand with your reorder point, which tells you when to place the next order.
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Related terms
Run it in one system
VNDLY tracks stock, orders, and suppliers together so terms like this stop being theory and start being automatic.