safety stock


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Safety Stock

Inventory a company keeps in order to avoid running out. For example, a grocery store may buy more apples than it expects to sell in case there is a sudden uptick in demand or if the next delivery is delayed. Safety stock is considered a drain on a company's finances because it very likely will not sell. However, it may be necessary for the smooth function of a business. See also: Supply chain management.

safety stock

see STOCK CONTROL.
References in periodicals archive ?
The visuals should quantify the variability of actual consumption, provide visual clues on the amount of inventory being carried on-hand, and the amount of safety stock held,” shared Leonard.
Safety stock was proportional to the actual demand.
Outputs from Quintiq Demand Planner can be incorporated into other Quintiq solutions and used to support other critical tasks such as supply and demand planning, available to promise planning and determining optimal safety stock levels.
An average student should be able to identify anticipation inventory and safety stock inventory.
Safety stock determination for individual cluster member.
If the mean demand at the customers is D and if the policy for reserve stock specifies that a portion r should be held, then rD is the safety stock for finished products at the retailer's stores.
The final initiative completed for both projects was new safety stock calculations for the different stockrooms supporting the IPMD and MWOs.
Commonly used statistical forecasting tools offer "best fit" algorithms and accuracy measures, as well as deviation statistics used in establishing safety stock levels (covered later in this article).
Inventory holding cost (IHC) and safety stock inventory (SSI) are critical to the effective management of inventory, and their quantification has impact at the highest levels of many manufacturing and service industries.
A resilient enterprise can exist through safety stock, though redundancy is expensive.
We have added safety stock in the DCs [distribution centers], and we're actively reducing store-level safety stock," Robert Niblock, Lowe's chairman, president and CEO, said during the retailer's second-quarter earnings call.
In short, safety stock, stockpiles, and buffers are creeping back into supply chains, especially the supply chains that flow across international boundaries.