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Safety Stock Setting

Safety stock setting in replenishment refers to the strategy of keeping extra inventory on hand to protect against unexpected shortages or delays in supply. This extra stock acts as a buffer, ensuring that a business can continue to meet customer demand even if there are fluctuations in sales or supply chain issues. By calculating the appropriate amount of safety stock, companies can minimize the risk of running out of products while avoiding excess inventory. This balance helps maintain smooth operations and customer satisfaction.