Forecasts are never perfect and suppliers sometimes miss. Safety stock is extra inventory held specifically to buffer against uncertainty in demand or supply so that service targets can still be met.

Statistical methods size safety stock from demand variability, lead-time variability, and desired service level. Higher service targets and more volatile patterns require more buffer. Safety stock differs from cycle stock, which covers average demand between replenishments.

Excessive safety stock ties up capital; insufficient safety stock produces stockouts. Regular review keeps buffers aligned with current variability. Safety stock is a deliberate cost paid for resilience at the SKU level.

• Buffer inventory against demand or supply uncertainty
• Sized from variability and service-level targets
• Distinct from cycle stock
• Reviewed as conditions change