Safety stock calculator
Safety stock is the extra stock you keep so a busy week or a late delivery doesn't leave you sold out; the reorder point is the stock level that tells you to order again. Enter your daily sales, how much they swing and your supplier's lead time, then drag the safety stock line on a simulated stock chart and watch stockouts appear and disappear. Or upload a SKU list for every reorder point at once.
Safety stock is the extra stock you keep so a busy week or a late delivery doesn’t leave you sold out. The reorder point is the stock level that tells you to order again.
- Reorder pointOrder more when stock falls to this: daily sales × lead time, plus safety stock.
634 units
560 for the lead time + 74 safety stock- Safety stockz × √(lead time × σ² of daily sales + daily sales² × σ² of lead time): the buffer above what you expect to sell while you wait.
- 74 units1.8 days of sales
- Service levelThe z-score is how many standard deviations of demand the buffer covers. 95% service needs z = 1.65.
- 95%z = 1.64
- Order cycles that ran out
- 6.6%8 of 121 in 10 simulated years
The formula: 1.64 × √(14 × 12²) = 74 units.
Showing the worked example: 40 units a day with a standard deviation of 12, a 14-day lead time and 95% service. Drag the chart or type your own.
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How to read your number
Safety stock is the extra stock you keep to cover days when sales run above average or a shipment arrives late. The reorder point is the stock level that triggers a new order: what you'll sell during the lead time plus that buffer. At 40 units a day with a standard deviation of 12, a 14-day lead time and a 95% service level, safety stock is 74 units and you reorder at 634.
Why it matters
Running out of a bestseller loses the sale and often the customer, and ad spend keeps sending people to a page with nothing to buy. Too much buffer ties up cash in stock that sits. Safety stock sets that tradeoff on purpose, product by product, instead of leaving it to gut feel.
Automations
Check your safety stock on a schedule
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Formula
Safety stock = z × σ(daily sales) × √(lead time in days); reorder point = daily sales × lead time + safety stock
z comes from your service level: the share of order cycles you want to get through without running out. 95% is z = 1.645. σ is the standard deviation of daily unit sales; a spreadsheet's STDEV of the last 60–90 days of daily units works. Variability grows with the square root of time, which is why lead time sits under a root.
Other ways to calculate safety stock
- With lead-time variability
- Safety stock = z × √(lead time × σ(sales)² + daily sales² × σ(lead time)²)
- When your supplier's delivery time swings as well, such as overseas freight. Enter the lead time standard deviation in the calculator to use it.
- Lead-time variability only
- Safety stock = z × daily sales × σ(lead time)
- When sales are steady but deliveries aren't. With 40 a day and a 3-day spread at 95%, that's 1.645 × 40 × 3 = 197 units.
- Max minus average
- Safety stock = max daily sales × max lead time − average daily sales × average lead time
- A quick rule without statistics. It covers the worst case you've seen, so it usually holds more stock than the z-score method.
- Days of cover
- Safety stock = daily sales × days of buffer
- When you don't have daily history yet, such as a new product. Pick a buffer, say 7 days, and switch to the z-score method once you have a few months of sales.
Reorder points for every SKU at once
Switch the calculator to the SKU view and download the template. Each row needs a SKU, average daily sales and lead time in days; add the standard deviation of daily sales, lead time variability, stock on hand, unit cost and price for the full plan. Without a standard deviation it assumes √(daily sales), the spread of a product that sells at random.
It returns safety stock, reorder point, an EOQ order size and days of stock left for every SKU, marks the ones at or under their reorder point, and estimates the GMROI the planned stock would earn. Sort by days of stock to see what to order first, and download the plan as a CSV. The file is read in your browser and never uploaded.
How to choose a service level
The service level is the chance a single order cycle ends without a stockout. Higher costs more stock, and the cost climbs steeply: in the example, going from 90% to 95% adds 16 units of safety stock, but going from 99% to 99.9% adds 34.
Set it by product. Bestsellers you advertise, and products where a stockout sends customers to a competitor, earn 97.5–99%. Slow sellers, seasonal lines and easy substitutes can sit at 85–90%, which frees cash for the products that matter.
How to calculate safety stock: a worked example
A store sells an average of 40 units a day, with a standard deviation of 12 units. Its supplier takes 14 days to deliver, and it wants a 95% service level.
- z at 95% = 1.645
- Safety stock = 1.645 × 12 × √14 = 1.645 × 12 × 3.74 = 74 units
- Demand during lead time = 40 × 14 = 560 units
- Reorder point = 560 + 74 = 634 units
When stock falls to 634 units, place the next order. If the lead time also varies by 3 days, safety stock rises to 211 units and the reorder point to 771: unreliable delivery costs more buffer than uneven sales.
How much safety stock is too much?
Compare safety stock with your order size. If the buffer is larger than a typical order, you're holding more insurance than working stock: shorten the lead time, order more often, or lower the service level on that product.
Recalculate each quarter and before peaks. Daily sales and their spread both rise in busy seasons, so a buffer set in a quiet month will run short. Pair it with the EOQ calculator for how much to order and the sell-through rate calculator to see how fast it moves.
| Service level | z-score | Safety stock (example) | Reorder point (example) |
|---|---|---|---|
| 80% | 0.842 | 38 units | 598 units |
| 85% | 1.036 | 47 units | 607 units |
| 90% | 1.282 | 58 units | 618 units |
| 95% | 1.645 | 74 units | 634 units |
| 97.5% | 1.960 | 88 units | 648 units |
| 98% | 2.054 | 92 units | 652 units |
| 99% | 2.326 | 104 units | 664 units |
| 99.5% | 2.576 | 116 units | 676 units |
| 99.9% | 3.090 | 139 units | 699 units |
Questions about safety stock
- What is safety stock?
- Safety stock is extra inventory kept on top of what you expect to sell while you wait for a delivery, so a busy week or a late shipment doesn't leave you sold out. At 40 units a day with a standard deviation of 12 and a 14-day lead time, 95% service needs about 74 units.
- What is the formula for safety stock?
- Safety stock = z × σ × √L, where z is the z-score for your service level, σ is the standard deviation of daily sales, and L is lead time in days. At 95% service, 12 units of daily spread and a 14-day lead time, it's 1.645 × 12 × √14 = 74 units.
- How do you calculate the reorder point?
- Multiply average daily sales by the lead time in days, then add safety stock. At 40 units a day, a 14-day lead time and 74 units of safety stock, the reorder point is 560 + 74 = 634 units.
- What is a good service level for safety stock?
- Most stores use 90–98%. Pick higher for bestsellers and products you advertise, where a stockout wastes ad spend, and lower for slow or easily substituted products. Each step above 95% costs noticeably more stock.
- What z-score is used for 95% service level?
- 1.645. It's the one-sided z-score: the number of standard deviations above average demand that covers 95% of cycles. 90% is 1.282, 97.5% is 1.960, 99% is 2.326.
- How do I find the standard deviation of daily sales?
- Export daily unit sales for the product over the last 60 to 90 days, including days with zero sales, and use your spreadsheet's STDEV function. Leave out one-off spikes from a promotion, since safety stock covers normal swings, not planned events.
Sources
Do it with Replo
Know before a bestseller runs out
Replo reads your sales and stock, and flags products that have dropped below their reorder point.
Prompt: “every morning, list the products whose stock is below their reorder point, with days of stock left”
