Supply Chain & Procurement worked example

Safety Stock Calculator with service-level factor of 4.13 σ: a worked example

Push service-level factor up to 4.13 σ and the picture changes. This example computes every intermediate figure at that operating point. Use it to set buffer stock that hits a target service level in Supply Chain & Procurement.

The inputs for this scenario

  • Service-level factor (Z): 4.13 σ (raised for this scenario; the documented default is 1.65)
  • Demand standard deviation: 40 units (unchanged)
  • Lead time: 9 periods (unchanged)

Working through the calculation

  • Applying the documented formula (Safety stock = service-level factor (Z) × demand std dev × √(lead time)) to the inputs above produces each figure below.
  • At this operating point the engine returns 496 units for safety stock, the number this scenario is built around.
  • At this operating point the engine returns 4.13 σ for service factor (z).
  • At this operating point the engine returns 40 units for demand std dev.
  • At this operating point the engine returns 3 x for lead-time factor (√lt).

How this compares with the baseline

  • Against the tool's baseline example, where service-level factor sits at 1.65 σ and the headline result is 198 units, this scenario comes in 150% above the baseline at 496 units.
  • It computes the buffer units needed by multiplying the service-level factor (Z) by demand standard deviation and the square root of lead time. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Safety stock: 496 units (headline result)
  • Service factor (Z): 4.13 σ
  • Demand std dev: 40 units
  • Lead-time factor (√LT): 3 x

Run it with your numbers

  • Every input above is editable in the live Safety Stock Calculator calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.