# What is safety stock?

> Safety stock is the extra inventory held to cover demand spikes or late deliveries. Definition, a simple formula and a worked example.

Updated 2026-11-06. Source: https://atta.sh/glossary/safety-stock

Safety stock is the buffer of inventory kept above expected demand during lead time, so a spike in sales or a late delivery doesn't cause a stockout. A simple version is the gap between worst-case and average demand over lead time.

## Example

A hardware shop sells an average of 10 padlocks a day. The supplier's lead time is usually 6 days but has been 9. In its busiest weeks it sells 14 a day.

Worst case over lead time: 14 x 9 = 126. Average case: 10 x 6 = 60. Safety stock = 126 - 60 = 66 padlocks.

That is a lot of stock to hold for rare conditions, so many shops choose a middle value such as 30 and accept the occasional stockout.

## In Atta

Safety stock sits inside the reorder point. If you set a point of 90 for padlocks, that already includes the buffer, and when on-hand falls to 90 Atta opens a restock request.

The stock outlook reads on-hand from the ledger, the measured rate of use and the supplier's quoted lead time. It estimates when an item runs out in a straight line. Counts are written to the ledger as the difference from what was expected, so the buffer you think you hold is the one the ledger shows.

## Cost of holding it

Extra stock ties up cash and shelf space. At $4 a padlock, 66 units is $264 sitting on a shelf. If that stock turns slowly, a shorter lead time from the supplier can be cheaper than a larger buffer.

## Questions

### How much safety stock do I need?

It depends on how bad a stockout is for you. Critical parts justify a larger buffer than commodity items.