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Safety stock is the buffer inventory that absorbs demand spikes while you wait for a replenishment order. The standard formula is Z × σd × √L: the service-level factor, times the standard deviation of daily demand, times the square root of lead time in days. Calculate yours below.
Recommended safety stock
50 units
Reorder point: 330 units (avg demand × lead time + safety stock — see the reorder point calculator)
Safety Stock = Z × σd × √L. Demand doesn't arrive evenly — some days sell 3 units, some sell 30. While a replenishment order is in transit, you're exposed to that variability for the whole lead time. The σd × √L term measures how far demand can plausibly swing over the lead time; Z sets how much of that swing you choose to cover (95% service ⇒ Z = 1.65, meaning you accept a stockout in roughly 1 of 20 replenishment cycles).
Worked example: a product sells 20 units/day on average with a standard deviation of 8, and your supplier takes 14 days. At a 95% service level: 1.65 × 8 × √14 ≈ 50 units of safety stock, and a reorder point of 20 × 14 + 50 = 330 units — when stock dips below 330, it's time to order.
The formula is only as good as σd and L — and both drift. A product going viral doubles its σd; a supplier slipping from 14 to 21 days silently invalidates every buffer you computed last quarter. That's why spreadsheet safety stock fails quietly: nothing tells you the inputs changed. Yeer recomputes these per product, continuously, from your live Shopify data — see demand forecasting and demand sensing.
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The standard formula is: Safety Stock = Z × σd × √L, where Z is the service-level factor (1.65 for 95%), σd is the standard deviation of daily demand, and L is the lead time in days. It buffers against demand varying while you wait for a replenishment order to arrive.
95% (Z = 1.65) is the common default. Use 98–99% for bestsellers, products that drive rankings, or items whose stockout loses the customer entirely; use 90% for long-tail products where holding extra stock costs more than an occasional miss.
Export daily unit sales for the product (60–90 days), then use STDEV in a spreadsheet. If sales are seasonal, use a window that matches the current season. Tools like Yeer compute this per product automatically from your Shopify history.
The basic formula assumes lead time is fixed. If your supplier's lead time varies a lot, the extended formula adds a lead-time variance term: SS = Z × √(L × σd² + d̄² × σL²). In practice, most Shopify stores start with the basic formula and add buffer for unreliable suppliers.
Yes. Yeer recalculates safety stock continuously per product from live demand volatility and lead-time data, so buffers tighten or grow as reality changes instead of being set once in a spreadsheet. It starts free for up to 50 products.
Yeer maintains safety stock and reorder points per product, automatically, from your live sales data. Free up to 50 products.
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