concept

Safety Stock Models

Safety stock models are inventory management concepts used to determine the optimal level of buffer stock to maintain in order to mitigate risks of stockouts due to demand variability or supply chain disruptions. They involve mathematical formulas and statistical methods to calculate safety stock based on factors like lead time, demand uncertainty, and service level targets. These models help businesses balance inventory costs against the risk of lost sales or production delays.

Also known as: Safety Stock, Buffer Stock Models, Inventory Buffer Models, SS Models, Safety Stock Calculations

🧊Why learn Safety Stock Models?

Developers should learn safety stock models when building or optimizing inventory management systems, supply chain software, or enterprise resource planning (ERP) tools, as they are critical for ensuring product availability and operational efficiency. They are particularly useful in e-commerce, manufacturing, and retail applications where accurate stock levels directly impact customer satisfaction and business performance. Understanding these models allows developers to implement data-driven inventory policies that reduce costs while maintaining high service levels.