u/kshine_zephyr

I’m curious how companies handle safety stock in real life.

In textbooks, we often see statistical approaches based on demand variability, service level, and lead time.

But in practice, I’ve seen much simpler methods used quite often, such as:

• Average daily demand × X days of safety stock
• A fixed number of days of cover by category
• Planner judgment based on experience
• Different rules for stable vs. volatile SKUs
• A combination of system calculation and manual override

What interests me most is not the textbook formula, but what companies actually do.

A few questions I’d love to hear about:

• What method does your company use?
• Is safety stock calculated at SKU level, category level, or another level?
• Who decides the parameters — planners, supply chain managers, algorithms, or the system?
• How often is it reviewed?
• What usually triggers a change: demand volatility, lead time, service level, inventory pressure, supplier risk, or something else?

I’m especially curious whether larger companies use more statistical approaches in practice, or whether simple days-of-cover rules are still common.

Would love to hear examples from different industries and company sizes.