Business
Safety Stock Calculator
Estimate extra stock to hold for demand spikes during supplier lead time.
This is the extra stock to hold on top of normal stock, so busy days during the delivery wait do not leave you out of stock.
Formula
Safety stock = (maximum daily usage minus average daily usage) multiplied by lead time in days.
How it works
Subtract typical daily sales from the busiest realistic daily sales, then multiply by how many days a delivery takes. The buffer absorbs busy days while waiting for stock, without holding far more than needed.
Worked example
For example, with maximum daily usage of 30 units, average daily usage of 20 units, and a lead time of 7 days, safety stock is (30 − 20) × 7 = 70 units.
FAQs
How do I know maximum daily usage?
Look at recent sales records and pick a realistic busy day, not a one-off record spike.
Does this cover late deliveries?
Only partly. If suppliers are often late, use a longer lead time in the calculation as well.
Is more safety stock always safer?
It prevents stockouts but ties up cash and space, so balance the cost of a stockout against holding cost.
Estimates only, not financial advice. Check your figures before making a business decision.
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