Safety stock is the additional units of stock kept over and above the average level of stock. Companies maintain such stock to minimize the risk of getting out of stock. A Safety stock calculator is a tool to help in making such calculations easy.
Safety stock is calculated by subtracting average daily usage for the average lead time from maximum daily usage for the maximum lead time. Following is the mathematical presentation of the formula:
Safety Stock = (Maximum daily usage *Maximum lead time) – (Average daily usage * Average lead time)
Safety Stock Calculator
How to Calculate using Calculator?
The calculator requires the following variable for a quick calculation result:
Maximum Daily Usage – It is the maximum number of usage of units in production or sales during a day.
Maximum Lead Time – It is the maximum time supplier takes to deliver the order. This is expressed in a number of days.
Average Daily Usage – Daily average usage defines an average number of units consumed in production or sold during a day.
Average Lead Time – It is the average time supplier takes to deliver the order. It is also expressed in a number of days.
