Free tool

Safety stock calculator.

Work out how much extra stock to hold so a busy week or a late delivery does not leave you empty. Pick the method that fits the numbers you have. Nothing you type is sent anywhere or saved.

Method 1: worst case against average

The simplest method. It needs only the best and worst numbers you have seen.

Safety stock

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Enter your numbers to see the result.

The formula in plain words.

Safety stock = (highest daily sales × longest lead time) minus (average daily sales × average lead time)

Picture two weeks. In the average one you sell at your usual pace and the delivery arrives on time. In the worst one you sell at your busiest pace and the delivery is as late as it has ever been. The gap between the two is the stock that covers you.

A worked example

Average sales are 12 a day and your best day was 20. Lead time is usually 14 days and once took 21. The worst case is 20 × 21 = 420 units. The average case is 12 × 14 = 168 units. Safety stock is 420 minus 168 = 252 units.

This method is cautious, because it assumes the worst sales and the worst delay arrive together.

Method 2: service level

Use this if you can work out how much your daily sales vary. A spreadsheet's standard deviation function does it.

How often you want to have stock when a customer wants it, during a lead time.
How far daily sales usually stray from the average, in units.

Safety stock

Enter numbers

Enter your numbers to see the result.

The formula in plain words.

Safety stock = z score × standard deviation of daily sales × square root of lead time in days

The standard deviation measures how bumpy your daily sales are. The longer the lead time, the more bumps you sit through, but the effect grows with the square root of the days, not with the days themselves. The z score turns the service level you want into a multiplier: the higher the service level, the bigger the cushion.

A worked example

Daily sales stray by about 4 units, the lead time is 14 days and you want a 95% service level. The square root of 14 is about 3.74, so 1.65 × 4 × 3.74 is about 24.7. Round up to 25 units.

This method assumes a steady lead time and sales that follow a bell curve. It does not cover late deliveries, so add some if your supplier is unreliable.

Good to know.

Both methods are standard textbook formulas applied to the numbers you give them. Your result is only as good as those numbers, so check it against your own judgement. Once you have a figure, add it to your reorder point.

Want these numbers worked out from your own Shopify sales? Wharfly is in the Shopify App Store.