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Inventory
Safety stock
Safety stock is additional inventory held to absorb uncertainty in demand and lead time.
Also known as
Buffer stock
Direct answer
What is Safety stock?
Safety stock is additional inventory held to absorb uncertainty in demand and lead time. A blanket buffer ignores differences in volatility and importance. Optimal safety stock balances target service level with tied-up capital.
Practical example
A stable basic item needs less buffer than a campaign product with volatile demand and unreliable lead time.
What teams should remember
Safety stock is additional inventory held to absorb uncertainty in demand and lead time.
A blanket buffer ignores differences in volatility and importance. Optimal safety stock balances target service level with tied-up capital.