Safety Stock
Buffer inventory held above the minimum required level to guard against supply disruptions or unexpected demand spikes.
Full Definition
Safety stock (also called buffer stock) represents the extra quantity of goods a company maintains in its warehouse to mitigate the risk of stockouts caused by demand variability or supply delays. It is calculated based on lead time variability, service level targets, and demand forecasts. As a compound noun, 'safety stock' is two words with no hyphen in standard usage. Editors should not conflate it with 'reorder point', which is the inventory level that triggers a new purchase order, or with 'cycle stock', which is the inventory consumed between orders.
Usage
Usage note: Two words, no hyphen. Distinguish from 'reorder point' (a trigger level) and 'dead stock' (unsellable inventory). 'Buffer stock' is an acceptable synonym.
In Context
- "The logistics manager increased safety stock levels after the supplier reported production delays." — Inventory management report
- "'Safety stock' is two words and should not be hyphenated except in attributive use." — Editorial style note