Safety stock = z · σ · √L - how many spares to carry above expected demand to cover lead-time demand variability.
Formula
$$ SS = z \cdot \sigma \cdot \sqrt{L} $$
Symbol legend
| Symbol | Meaning | Unit | Source |
|---|---|---|---|
| $z$ | Normal-quantile for service level | - | lookup |
| $σ$ | Demand volatility | units / period | history |
| $L$ | Lead time | periods | procurement |
Sources
- IACS UR Z18 - Critical equipment and spares.