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Safety stock calculator

Safety stock in units and the reorder point, with every step of the working.

Safety stock calculator

How do you want to work it out?

With a service level if you know the standard deviation of your sales; otherwise from the highest figures you have seen.

Time unit

The same for demand and for lead time: demand per week goes with a lead time in weeks.

Units sold or used on average per day, week or month.

For the same period, worked out from a few months of sales at least (STDEV in a spreadsheet). Leave blank if demand is steady.

From placing the order to the goods being on the shelf, in the same time unit.

Leave blank if your supplier always delivers in the same time.

The chance of not running out while you wait for a delivery.

What one unit costs you, excluding VAT you reclaim, to see the value tied up in safety stock.

£

Safety stock, in units

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Enter your demand and lead time to see the safety stock.

Average demand over the lead time
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Reorder point
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Recent calculations

Nothing yet: copy, export or save a calculation to find it here.

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How it works

Safety stock, also called buffer stock, is the extra stock you keep on top of what you expect to sell while you wait for a delivery, so that you do not run out when demand is higher than usual or a delivery is late. Enter your average demand and lead time and choose a method: you get the safety stock in units, the reorder point at which to place your next order, and every step of the working. Add a unit cost to see how much money the safety stock ties up.

Choose a method

‘Service level’ is the statistical method, based on the normal distribution: it needs the average and standard deviation of your demand, those of your lead time if deliveries vary, and the service level you want. ‘Maximum minus average’ needs no statistics: give the highest demand and the longest lead time you have seen. The reorder level then covers that worst case, highest demand × longest lead time, and the safety stock is the amount by which it exceeds average demand over the average lead time, which is how ACCA defines buffer inventory. It is quicker, but it can hold more stock than you need, because it assumes both bad cases at once.

Keep every figure in the same time unit

Choose days, weeks or months and stick to it: demand per week goes with a lead time in weeks and the standard deviation of weekly demand. Work out the standard deviation from your own sales history, with STDEV in a spreadsheet, over several months at least, leaving out one-off events such as a single bulk order.

Choose the service level

The service level here is the cycle service level: the chance of not running out while you wait for a delivery. At 95%, expect a stock-out in about one replenishment cycle in twenty. It is not the share of demand you meet from the shelf (the fill rate), which is usually higher for the same stock. Each step up costs more: going from 95% to 99% raises z from 1.645 to 2.326, about 41% more safety stock.

Rounding and using the result

The safety stock is worked out to two decimal places, halves rounded away from zero, then rounded up to a whole unit, so you do not hold less than the formula asks for. The reorder point, average demand over the lead time plus that safety stock, is rounded up too. z is taken to three decimal places, the precision of printed tables, and that is the z used. The cover is rounded down to a hundredth. Copy the workings, export them as a CSV file or save them to Priostack.

Service level: safety stock = z × √(L × σd² + d² × σL²).

Maximum minus average: safety stock = maximum demand × maximum lead time − average demand × average lead time.

Reorder point = d × L + safety stock.

d and σd are the average and standard deviation of demand per period; L and σL those of the lead time, in the same periods; z is the standard normal value for the service level (1.645 at 95%).

Example: 40 units a day, delivered in 9 days on average

A shop sells 40 units a day of a product on average, with a standard deviation of 12 units. Its supplier takes 9 days on average to deliver, with a standard deviation of 2 days. At a 95% service level, z = 1.645, and the standard deviation of demand over the lead time is √(9 × 12² + 40² × 2²) = √7,696 = 87.727. The safety stock is 1.645 × 87.727 = 144.31, so 145 units. Average demand over the lead time is 40 × 9 = 360 units, so the shop reorders when its stock falls to 360 + 145 = 505 units. The safety stock covers 3.62 days of average sales; at £4.20 a unit, it ties up £609.00.

Frequently asked questions

How do you calculate safety stock?

With the statistical method, multiply z, the factor for your service level, by the standard deviation of demand over the lead time. When only demand varies, that is the standard deviation of demand per period × √lead time: with a standard deviation of 10 units a day, a 9-day lead time and a 99% service level (z = 2.326), the safety stock is 2.326 × 10 × 3 = 69.78, so 70 units.

What z should I use for a 95% service level?

1.645. The usual values are 1.282 at 90%, 1.645 at 95%, 1.960 at 97.5%, 2.326 at 99% and 3.090 at 99.9%, as in NIST’s table of the normal distribution. Rounded to 1.65, as you will sometimes see it, z gives a slightly larger safety stock.

What is the difference between safety stock and the reorder point?

The reorder point, or reorder level, is the stock level at which you place an order: average demand over the lead time plus the safety stock. The safety stock is the part kept for the bad cases; in an average cycle, it is still on the shelf when the delivery arrives. ACCA puts it the same way: buffer inventory is the amount by which the reorder level exceeds average demand in the lead time.

Does a 95% service level mean 95% of orders are met?

No. The service level here counts replenishment cycles, not units. A stock-out in one cycle in twenty often leaves only a few units short at the end of that cycle, so the share of demand met from stock, the fill rate, is usually higher. In an example by Chopra, Reinhardt and Dada, a product reaches a fill rate of 97.18% at a cycle service level of only 50%. If your target is a fill rate, a lower service level here may be enough.

Should I allow for lead times that vary?

Yes, if deliveries arrive early or late. Variation in lead time can weigh more than variation in demand: in the example above, the 2-day standard deviation of lead time puts 40² × 2² = 6,400 of the 7,696 under the root. Without it, the safety stock would be 1.645 × 12 × 3 = 59.22, so 60 units instead of 145.

When should I use maximum minus average?

When you have no standard deviation to hand, or too few sales to work one out. It covers the highest demand and the longest lead time you have seen happening together, which is rare, so it can give more safety stock than a 95% or 99% service level. With a maximum of 60 units a day over a 15-day lead time against an average of 40 a day over 10 days, it gives 60 × 15 − 40 × 10 = 500 units, and a reorder point of 900.

Sources

  1. Chopra, Reinhardt and Dada, ‘The Effect of Lead Time Uncertainty on Safety Stocks’, Decision Sciences 35(1), 2004: the standard deviation of demand over the lead time, cycle service level and fill rate (tables 1 and 2) (11 November 2026)
  2. NIST/SEMATECH e-Handbook of Statistical Methods, section 1.3.6.7.1: cumulative distribution function of the standard normal distribution, with its table of critical values (11 November 2026)
  3. ACCA, Management Accounting technical article: Inventory control (re-order level and buffer inventory) (11 November 2026)
  4. NC State University, Supply Chain Resource Cooperative: Reorder point formula, a tutorial (cycle service level and fill rate) (30 January 2011)

This calculator gives general information, not legal, tax, financial or accounting advice. The result is only as good as the figures you enter, and the statistical method assumes demand that follows a normal distribution: compare it with your own stock-outs before you rely on it.

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