ABSTRACT
Inventory or work on hand that is held to absorb fluctuations that cannot be predicted based upon normal variation around the average. Safety stock can be determined based upon disaster planning requirements, or based upon the known failure rate of a supplying process. For disaster planning (e.g., to protect a hospital from supply chain disruptions in the event of an earthquake or flood), the amount of safety stock should be sufficient to protect production of Services for the number of days anticipated to restore normal supply operations. For failures in supplying processes, safety stock should be equal to the known failure rate times the delivery lead time.
