Supply Chain Hacks

The Quick Way to Reset Safety Stock

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Maximum daily use x Maximum lead time in days
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Average daily use x Average lead time in days
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Safety stock

The safety stock formula is:

Safety stock = [ Maximum daily use x Maximum lead time ] – [ Average daily use x Average lead time ]

Safety stock calculator

Use the safety stock calculator to work out how much stock you should hold in reserve for each product or component in your warehouse.

Once you know your safety stock figures, you can use the reorder point calculator below to determine the level of inventory at which you should replenish goods.

Be aware: Because your safety stock figures are based on historic data you should sense-check them against what you know about your business. Are sales trending up or down? Do you have promotions running – or ending – soon? Factors like these will affect your ideal safety stock levels.

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