EOQ with Safety Stock Calculator

No — and that surprises people. The economic order quantity balances ordering cost against the holding cost of the cycling half-order, while safety stock is a constant layer underneath that the order size doesn’t touch. The buffer changes your average inventory and annual holding cost, not the optimal amount to order each time. That is exactly why quoting EOQ costs without the buffer understates reality.

Each order cycle starts with a full order quantity on top of the buffer and drains to just the buffer before the next delivery lands, so the cycling portion averages half the order size. The safety stock, by design, is still there at the low point. With a 548-unit order and a 350-unit buffer you swing between 898 and 350, averaging about 624 units on hand at any moment.

From your demand and lead-time variability, not a round number. The max-minus-average method is the practical version: worst realistic daily sales times worst realistic lead time, minus the average case. Compute it in the safety stock calculator and paste the result here; a buffer picked by gut feel is usually either double what you need (cash asleep) or half (stockouts anyway).

When its assumptions break: strongly seasonal or lumpy demand, supplier MOQs far above the computed EOQ, perishables with shelf-life limits shorter than the order cycle, or one-off buys for a product you won’t restock. In those cases use it as a sanity check rather than a rule — and recompute each season with that period’s demand rate instead of a single annual figure.