Buffer stock without overstocking
Safety stock is the cushion that protects you when sales spike and a delivery is slow at the same time. Too little and you stock out of your best sellers; too much and you freeze cash on the shelf.
The calculation compares your worst case (fastest sales over the longest lead time) against a normal cycle. The difference is the buffer worth holding. Reorder when stock hits the reorder point, so the next delivery lands before the buffer is gone.