Inventory Tool 18

Safety
Stock
Calculator

Calculate optimal safety stock across service levels, demand variability, and lead time uncertainty. Balance stockout risk against the working capital cost of holding buffer inventory.

1Demand Parameters

Avg Daily Demand (units)

Max Daily Demand (units)

Peak demand day

Demand Std Deviation

Daily units std dev

2Lead Time

Avg Lead Time (days)

Max Lead Time (days)

Lead Time Std Dev (days)

3Cost & Service Level

Target Service Level (%)

Unit COGS ($)

Holding Cost Rate (%/yr)

Stockout Cost ($/unit)

Lost margin per unit missed

Safety Stock - Statistical

Safety Stock - Simple (Max)

Annual Holding Cost of SS

Recommended Safety Stock - units at 95% service level

Safety Stock Methods

Z-score (service level) -

Demand std × √avg lead time -

Avg demand × lead time std -

Statistical Safety Stock -

Simple: (MaxDemand − Avg) × MaxLT -

Service Level Comparison

Service Level	SS Units	SS Cost/yr	Stockout Risk

Cost of Stockout vs Cost of SS

Annual holding cost of SS -

Expected stockouts avoided (units) -

Value of stockouts avoided -

Safety Stock Calculator