safety-stock-levels

Vocabulary Word

Definition

'Safety stock levels' refers to extra inventory that businesses maintain to protect against variability in market demand or delays in supply delivery. It's like a cushion for unexpected events.

Examples in Different Contexts

In inventory management, 'safety stock levels' refer to the extra quantity of a product kept in stock to prevent stockouts due to unforeseen demand or supply chain disruptions. A supply chain manager might explain, 'Maintaining optimal safety stock levels ensures we can meet customer demand even when there are delays from suppliers.'

Practice Scenarios

Business

Scenario:

We need to prepare our store for the upcoming holiday rush. What's the current state of our inventory?

Response:

Our current inventory is well-managed, but we need to optimize our safety stock levels for the holiday season.

Production

Scenario:

Our production can be vulnerable if we run out of raw materials. Have we checked our stockpiles recently?

Response:

Yes, we have been monitoring our raw material stocks. Safety stock levels are in place to handle production demands.