Safety stock

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Safety stock is inventory held at all times regardless of the quantity of inventory ordered using the EOQ model.

Definitions

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

Safety stock. Inventory held at all times regardless of the quantity of inventory ordered using the EOQ model.

According to Managerial Accounting by Braun, Tietz (5th edition),

Safety stock. Extra inventory kept on hand in case demand is higher than expected or problems in the factory slow production.

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