MihsabaHow to use
Estimate safety stock with the max-minus-average method using daily demand and lead time.
- Enter Maximum daily usage.
- Enter Maximum lead time (days).
- Enter Average daily usage.
- Enter Average lead time (days).
- Calculate, then review the metric definition and comparison limits.
How it is calculated
Example
Maximum usage of 120 for 10 days is 1,200; average usage of 80 for 7 days is 560, leaving 640 units of safety stock.
Important notes
This is a simple method, not a statistical service-level model. Outlier maxima or strong seasonality can overstate required stock.
Worked examples and interpreting results
Maximum usage of 120 for 10 days is 1,200; average usage of 80 for 7 days is 560, leaving 640 units of safety stock.
| Case | Calculation | Result |
|---|---|---|
| Maximum lead demand | 120 × 10 | 1,200 |
| Safety stock | 1200 − (80 × 7) | 640 |
How to check the result
This is a simple method, not a statistical service-level model. Outlier maxima or strong seasonality can overstate required stock.
Frequently asked questions
What if the raw result is negative?
Negative safety stock is not practical in this method; the calculator floors it at zero and the assumptions should be reviewed.
Should the inputs use the same period?
Yes. Use figures from the same reporting period and accounting definition so balances and flows remain comparable.
Is the result enough for a decision?
No. The metric summarizes a numerical relationship; compare it with company history, industry context, and accounting or operating policies.