What is a safety stock?
What is a safety stock?
What is a safety stock?
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3 Answers
A safety stock is a quantity of inventory held by a company as a buffer to ensure that it can meet unexpected demand or supply chain disruptions.
It is a surplus of stock that is held in reserve to protect against stockouts caused by unforeseen circumstances like fluctuations in customer demand or delayed shipments.
The purpose of safety stock is to avoid a situation where a company runs out of stock and is unable to fulfil orders from its customers.
The optimal level of safety stock varies depending on factors such as lead time, demand variability, and service level requirements.
It is a surplus of stock that is held in reserve to protect against stockouts caused by unforeseen circumstances like fluctuations in customer demand or delayed shipments.
The purpose of safety stock is to avoid a situation where a company runs out of stock and is unable to fulfil orders from its customers.
The optimal level of safety stock varies depending on factors such as lead time, demand variability, and service level requirements.
Safety stock is a buffer inventory held by a company to mitigate the risk of stockouts due to unexpected changes in demand, supply chain disruptions, or other unforeseen events. It represents extra inventory beyond what is needed to meet regular demand and is meant to ensure that the company can continue to fulfill customer orders even in the face of unexpected fluctuations. The level of safety stock needed depends on various factors such as lead time, demand variability, and service level targets.