Safety Stock Calculator

This calculator sets how much extra stock to hold so that normal day-to-day swings in demand during a supplier's lead time do not leave you out of stock. It gives the safety stock, the reorder point (the stock level at which you place a new order), expected demand during the lead time and how many days of sales the buffer covers.

It suits retailers, ecommerce sellers, wholesalers and manufacturers managing items with fairly steady demand and a known lead time. The service level you choose is the probability of not running out during each replenishment cycle; raising it from 95% to 99% increases safety stock by about 41%, so it pays to reserve the highest levels for critical items.

This version assumes lead time is constant and daily demand varies roughly randomly around its average. If your supplier's lead time also varies, see the extended formula below. To decide how much to order each time, use the EOQ calculator.

This is the standard statistical safety stock formula from inventory management texts, assuming normally distributed, independent daily demand and a fixed lead time. When lead time also varies, use Z × √(L × σd² + d² × σL²), where σL is the standard deviation of lead time in days. The calculator rounds safety stock and reorder point up to whole units.

The service level here is the cycle service level: the chance of not running out before a replenishment arrives. Safety stock rises sharply as you approach 100%, which is why many businesses set levels by item class (for example, 98–99% for best sellers, 90% for slow movers).

• Reorder point = expected demand during the lead time + safety stock. When on-hand plus on-order stock drops to this level, place the next order.
• Safety stock in days = safety stock ÷ average daily demand. Some teams set a fixed number of days instead of using the formula, for example 7 days of cover. That is simple, but it holds too much of steady items and too little of volatile ones.
• Periodic review: if you only order on fixed days (say every 14 days), replace L with lead time + review period, because the stock must last until the order after next arrives.

• Measure demand variability from sales history, ideally 3–6 months of daily data. Use a spreadsheet's standard deviation function (STDEV.S) on daily units sold.
• Don't count stockout days as zero demand; they hide real demand and understate variability.
• Use total lead time: order processing, production, transit, customs and receiving.
• Watch the cost: safety stock is permanent inventory, so it ties up cash. The inventory turnover calculator and working capital calculator show the effect on your balance sheet.