Safety stock, also known as safety storage, or insurance stock, is the amount of insurance reserves expected to protect against uncertainty. Safety stock is used to meet lead time requirements. For a given safety stock, the average inventory can be described by half of the order lot and the safety stock.

The determination of safety stock is based on mathematical and statistical theory. First, it is assumed that the movement of inventory is around the average rate of consumption changes, greater than the average demand and less than the average demand of the probability of half of the probability of shortage.

The larger the safety stock, the less likely it is that there will be a shortage; however, a larger stock will lead to surplus stock. Stock-outs should be kept at an appropriate level according to the use of different items and the requirements of the customer, allowing a certain level of stock-outs to exist. The quantitative calculation of safety stock can be based on the customer demand is fixed, the demand changes, the lead time is fixed, the lead time has changed, etc., the use of normal distribution graph, standard deviation, the expected level of service, etc. to find.