What Is Safety Stock & How to Determine the Right Level?
IntroductionSafety stock is the extra inventory you keep on hand to protect your operations from variability in demand and supply lead time. You may never intend to deplete it fully, but when an unexpected sales surge or a supplier delay occurs, safety stock prevents stockouts, backorders, and lost revenue. At the same time, holding too […]
How to Calculate Reorder Points for Effective Inventory Management
Introduction Maintaining optimal inventory levels is a critical challenge for any business that holds stock. Order too late and you risk stockouts, lost sales, and dissatisfied customers; order too early and you tie up precious capital in inventory, increasing holding costs and risk of obsolescence. The reorder point (ROP) is a simple yet powerful metric […]
