Trade · 6 pages · 12 min

Why safety stock is a purchase of calm

Safety stock is extra inventory held so ordinary delays and demand spikes do not immediately empty the shelf.

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From the opening

Safety stock is a buffer of extra units above the quantity expected to be used before the next delivery arrives. It is held so that a late truck or a busier day than planned does not turn at once into a stockout. The opening covers extra units sit above expected use, a late delivery draws the buffer, and holding cost is the price of calm.

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Inside

Extra units sit above expected use
A late delivery draws the buffer
Holding cost is the price of calm
A sized buffer is not a glut
Where the idea stops applying
A distinction worth keeping

Sources

Safety stock as buffer inventory
Variability of demand and lead time

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Why safety stock is a purchase of calm

From the opening

Inside

Sources

Also on the desk