Calculate optimal inventory buffers to prevent stockouts
We used the standard safety stock formula that accounts for both demand and supply variability:
Safety Stock = Z x √(Lead Time x σd² + Avg Demand² x σLT²)
Where Z is the service factor based on your target service level, σd is demand standard deviation, and σLT is lead time standard deviation.
Your safety stock calculation looks good. Remember: this is a baseline. Seasonal demand, promotions, and market trends should adjust these numbers.
Forthcast dynamically adjusts safety stock based on seasonality, trends, and your actual sales data. No spreadsheets, no guessing.
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