Safety stock

safety stock
extra units of inventory carried as protection against possible stockouts. The safety stock must be carried when the firm is not sure about either the demand for the product or lead time or both.

Safety Stock
In general, a quantity of stock planned to be in inventory to protect againstfluctuations in demand and/or supply.

safety stock
a buffer level of inventory kept on hand by a company in the event of fluctuating usage or unusual delays in lead time
Shelf life control ...

Safety stock - Refers to the extra units of inventory carried as protection against possible stock outs.

Safety stock is the difference between average usage of materials and maximum usage of materials that can reasonably be expected during the lead time. This is used when there are usage uncertainties or delivery uncertainties.
Salary or wages ...

increased safety stock from 2.5 to 3.5 week supply, delivery frequency is one quarter. Drastically reduced manãƒ"hour requirement.
Total
4000 ...

Companies use forecast-distribution models in order to have the appropriate inventory, or safety stock, necessary to meet fluctuations in customer demand.

Distinguish between in-process inventory and safety stock inventory and seasonal inventory? Read answer...
What is the inventory? Read answer...
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See also: Lead time, Expense, Finished goods, Accounting records, Cost of goods