Safety stock calculator
Safety stock is the extra quantity that protects you from running out when demand spikes or a supplier is late.
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How to use it
- Enter target service level, standard deviation of daily demand, average lead time, average daily demand and standard deviation of lead time.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Safety stock = Z × √(lead time × demand SD² + average demand² × lead time SD²), where Z is the normal distribution factor for the service level (1.645 at 95%).
Example
Inputs: Target service level = 95 %, Standard deviation of daily demand = 10 units, Average lead time = 9 days, Average daily demand = 40 units, Standard deviation of lead time = 0 days. Result: Safety stock: 49.3 units; Safety stock rounded up: 50 units; Service factor Z: 1.6449.
Limits and caveats
- It assumes demand and lead time are normally distributed and independent of each other.
- Keep one time unit: if the deviation is weekly, enter lead time in weeks.
Questions about this tool
How do I get the standard deviation of demand?
Take daily sales for several weeks and run the STDEV function on them in Excel or Google Sheets.
Why does stock jump so much at 99%?
Z rises from 1.645 at 95% to 2.326 at 99%, so each extra point of service costs more than the one before.
When should I fill in lead time deviation?
When your supplier is sometimes late and sometimes early. Leave it at zero if deliveries are steady.