![]() Safety stock is simply extra inventory held by a retailer or a manufacturer in case demand increases unexpectedly. What is Safety Stock?īefore we dig into explaining how to use a safety stock formula, it’s useful to define what the term safety stock actually means. Using a safety stock formula helps you to take a data-driven approach to inventory management, maximizing sales and ultimately profits. However, this isn’t recommended as it can cause issues with stock outs causing customer frustration and lost sales. New trends, fluctuating demands and a constantly changing retail landscape all impact which products should be stocked and how many of each must be on the shelves and in the warehouse to maximize efficiency and reduce costs.įor some retailers, a safety stock calculation can simply be a gut-feeling, an educated guess at what they think is right. One of the biggest challenges in modern retail and manufacturing is stock management. ![]()
0 Comments
Leave a Reply. |