Skip to main content

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 point

634 units

560 for the lead time + 74 safety stock
Safety stock
74 units1.8 days of sales
Service level
95%z = 1.64
Order cycles that ran out
6.6%8 of 121 in 10 simulated years
Reorder point 634Safety stock 74 · 95% service2 days out of stock
Simulated daily sales around your average. Drag the top of the green band to change safety stock and watch stockouts (pink) appear or vanish; roll new days to see another run. Orders are placed when stock plus what's on order reaches the reorder point.

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.

Automate your busywork for free. Describe a job once and Replo runs it every week on your real store data.

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

Describe the job once. Replo runs it on your data from Shopify, Google Drive and Slack and posts what needs your attention.

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.

z-scores by service level, with safety stock for the worked example
Service levelz-scoreSafety stock (example)Reorder point (example)
80%0.84238 units598 units
85%1.03647 units607 units
90%1.28258 units618 units
95%1.64574 units634 units
97.5%1.96088 units648 units
98%2.05492 units652 units
99%2.326104 units664 units
99.5%2.576116 units676 units
99.9%3.090139 units699 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”

More free calculators

Browse all tools

Find trends in your business

Ask a question about your store and Replo answers it from every tool you connect.

Keep reading