Calculating Safety Stock

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5.00 hours
Online Self Study

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About the Course

Understanding the causes and effects of variability in the supply chain can help your company calculate safety stock and implement an effective safety stock management method.

Course Description

In this course, we will describe how to calculate safety stock. We will explore the importance of good safety stock management, as well as the roles and types of inventory. We will also detail the procedures of calculating safety stock in a continuous review environment, as well as in a periodic review environment. To assist you with assessing and practicing these skills, you will have the opportunity to work through multiple safety stock calculations.

DISCLAIMER: Although Microsoft© Office Excel is indicated as the primary tool for calculating safety stock, the use of the program is not mandatory to successfully complete the course objectives.

Learning Objectives

After completing this course, you should be able to:

  • Define inventory and its primary functions.
  • Show how safety stock is uniquely required to manage inventory.
  • Explain the role of variability as a driver of safety stock.
  • Discuss how safety stock requirements vary in continuous review vs. periodic review environments.
  • Develop a procedure for calculating safety stock in continuous review environments.
  • Develop a procedure for calculating safety stock in periodic review environments.
  • Describe the impact of performance metrics on safety stock requirements.


This course includes the following topics:

  • Roles and Types of Inventory
  • Calculating Safety Stock Processes in Continuous Environments
  • Calculating Safety Stock Processes in Periodic Environments