What is Safety Stock?
Safety stock is the extra quantity of an item kept in hand so the shop does not run out if sales are higher than expected or a delivery is late.
Updated
Meaning
English
Safety stock is the extra quantity of an item kept in hand so the shop does not run out if sales are higher than expected or a delivery is late.
Roman Urdu
Safety stock woh extra maal hai jo is liye rakha jata hai ke delivery late ho ya Sale zyada ho to dukaan khali na ho.
Also called buffer stock, reserve stock.
Example
A shop sells 10 packs a day and the supplier takes 4 days. It orders when 40 packs are left and keeps 10 more as safety stock, so the reorder point is 50.
A simple way to set it
Reorder level = average daily sales times lead time, plus safety stock. Keep more safety stock for fast-selling items and unreliable suppliers, and less for slow or expensive items. Review it each season, since sales change at Ramadan and Eid. See reorder level and the reorder level calculator.
In Nafaa
Nafaa lets you set a reorder level per product and lists low-stock items with how much to order. See low-stock alerts.
Related terms
- Reorder Level
A reorder level is the stock quantity at which a new order should be placed, so stock arrives before the shelf runs empty.
- Lead Time
Lead time is the number of days between placing an order with a supplier and receiving the goods.