Safety Stock
Safety stock is an additional quantity of inventory held beyond expected demand during a replenishment lead time, designed to protect against stockouts caused by demand or supply uncertainty. Reorder-point models formalize this buffer by setting a trigger inventory level at which a new order is placed. Systematically developed within the stochastic inventory-control framework by Silver, Pyke, and Peterson (1998), the approach translates a desired customer-service level into a precise buffer quantity using the statistics of demand and lead-time variability.
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- Silver, E. A., Pyke, D. F., & Peterson, R. (1998). Inventory Management and Production Planning and Scheduling (3rd ed.). Wiley. · ISBN 978-0-471-11947-0
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