Safety stock calculator
Work out how much buffer stock you need to survive the bad case: unusually high demand arriving at the same time as an unusually slow delivery. Enter your maximum and average daily usage and lead times, and the calculator applies the max-minus-average method.
This is the max-minus-average method: the buffer covers the worst case of high demand arriving at the same time as a slow delivery. It needs no statistics, which is why it survives contact with real SME data.
Why max minus average, not a percentage
Many businesses set safety stock as a flat percentage of average demand. That ignores the thing that actually causes stockouts, which is variability in the supplier lead time rather than in demand alone.
The max-minus-average method takes the worst realistic case — maximum daily usage over the maximum lead time — and subtracts the normal case. What is left is the buffer needed to cover the gap. It requires no statistics and no assumption of a normal distribution, which is why it holds up on real SME data.
Where the inputs come from
Pull maximum and average daily usage from the last twelve months of issues, not from a guess. Pull maximum and average lead time from your actual goods receipts against purchase orders, not from what the supplier promises.
The gap between the promised lead time and the observed maximum is usually the single most expensive number in a small business's inventory, and almost nobody measures it.
Questions
How do I calculate safety stock?
Multiply maximum daily usage by maximum lead time, then subtract average daily usage multiplied by average lead time. The result is the buffer needed to cover the worst realistic case.
What is the difference between safety stock and the reorder point?
Safety stock is the buffer held for the bad case. The reorder point is the stock level at which you place an order, which is expected demand during the lead time plus the safety stock.
How much safety stock is too much?
Safety stock is cash sitting on a shelf. If your buffer covers more than the observed worst case, you are financing your supplier's unreliability twice. Measure the actual lead time variation before increasing it.
A calculator answers one question once. Digital 9 Labs builds the system that answers it continuously — your real numbers, updated as the work happens, without anyone reopening a spreadsheet.