What is Safety Stock?
Safety stock is the cushion of inventory kept above expected demand to prevent stockouts when actual sales exceed forecast or suppliers run late.
A real Kenyan example
A salon stocks 25% extra shampoo over expected weekly use, in case a delivery is late.
Formula
Safety stock = (Max daily sales × Max lead time) − (Avg daily sales × Avg lead time)
Why it matters
Stockouts cost sales twice, once in the lost transaction, once in the lost customer who may not come back.
How Veira helps
Veira recommends safety stock per SKU from your demand variability and supplier reliability.
FAQs
How much safety stock?
25-50% of lead-time demand for most SMEs.
Is more always safer?
No, more safety stock means more cash tied up and more dead-stock risk.
Variable demand, what to do?
Use the higher (worst-case) daily sales when computing safety stock.
Perishables and safety stock?
Be aggressive, perishable safety stock turns into waste.
Does Veira track?
Yes, per SKU with seasonality adjustment.