Safety Stock
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High Quality Content by WIKIPEDIA articles! Safety stock is a term used by inventory specialists to describe a level of extra stock that is maintained below the cycle stock to buffer against stockouts. Safety stock (also called buffer stock) exists to counter uncertainties in supply and demand. Safety stock is defined as extra units of inventory carried as protection against possible stockouts (shortfall in raw material or packaging). By having an adequate amount of safety stock on hand, a company can meet a sales demand which exceeds the demand they forecasted without altering their productio...
High Quality Content by WIKIPEDIA articles! Safety stock is a term used by inventory specialists to describe a level of extra stock that is maintained below the cycle stock to buffer against stockouts. Safety stock (also called buffer stock) exists to counter uncertainties in supply and demand. Safety stock is defined as extra units of inventory carried as protection against possible stockouts (shortfall in raw material or packaging). By having an adequate amount of safety stock on hand, a company can meet a sales demand which exceeds the demand they forecasted without altering their production plan. It is held when an organization cannot accurately predict demand and/or lead time for the product. It serves as an insurance against stockouts.
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