Stockout Risk Inputs
Enter demand, lead time, service, and inventory assumptions. The form uses a three-column layout on large screens, two on smaller screens, and one on mobile.
Example Data Table
This example helps you compare a realistic inventory scenario with the calculator’s modeled output.
| Metric | Example Value |
|---|---|
| Average Daily Demand | 145.00 units/day |
| Demand Standard Deviation | 22.00 units/day |
| Average Lead Time | 12.00 days |
| Lead Time Standard Deviation | 2.50 days |
| Review Period | 6.00 days |
| Target Service Level | 97.00% |
| Current Inventory Position Input Set | 1,850.00 units |
| Adjusted Daily Demand | 173.77 units/day |
| Safety Stock | 956.68 units |
| Reorder Point | 4,240.89 units |
| Stockout Probability | 99.76% |
| Recommended Order | 3,434 units |
Formula Used
This model combines demand variability, lead-time variability, review period exposure, seasonality, growth, and supplier reliability into one engineering-style stockout estimate.
Core equations
- Adjusted Daily Demand:
da = d × s × (1 + g) - Adjusted Lead Time:
La = L × [1 + 0.75(1-r)] - Adjusted Lead-Time Std Dev:
σL,a = σL × [1 + 1.5(1-r)] - Protection Period:
P = La + R - Expected Demand in Protection Period:
μ = da × P - Demand Deviation in Protection Period:
σ = √(Pσd2 + da2σL,a2) - Safety Stock:
SS = z × σ - Reorder Point:
ROP = μ + SS - Inventory Position:
IP = On Hand + On Order - Backorders - Stockout Probability:
1 - Φ((IP - μ) / σ)
The model assumes approximately normal demand during the protection period. That makes it suitable for practical inventory planning, replenishment review, and shortage exposure screening.
How to Use This Calculator
- Enter your average daily demand and its standard deviation.
- Enter average lead time and lead-time standard deviation.
- Add review period days if orders are reviewed periodically.
- Enter current stock, on-order quantity, and any backorders.
- Set the target service level, seasonality factor, growth rate, and supplier reliability.
- Click Calculate Stockout Risk to see safety stock, reorder point, shortage risk, and recommended replenishment.
- Use the CSV and PDF buttons to save the results.
Frequently Asked Questions
1. What does stockout probability mean?
It is the estimated chance that demand during the protection period will exceed your current inventory position. Higher percentages signal a greater risk of shortages before replenishment arrives.
2. Why is safety stock important?
Safety stock protects against uncertainty. It absorbs demand spikes and lead-time delays so normal replenishment plans can still meet service targets without frequent emergency orders.
3. What is the protection period?
It is the time your inventory must survive before new stock becomes available. This usually includes lead time and any review delay between inventory checks.
4. How does supplier reliability affect the result?
Lower reliability increases modeled lead-time impact and variability. That raises safety stock and reorder point because uncertain supply makes shortages more likely.
5. What is inventory position?
Inventory position combines on-hand inventory, open purchase orders, and outstanding backorders. It is more useful than on-hand stock alone for replenishment decisions.
6. Why is fill rate different from service level?
Service level targets the probability of avoiding a stockout event. Fill rate estimates the share of demand fulfilled immediately. They are related, but they measure different outcomes.
7. Can I use this for periodic review inventory systems?
Yes. Enter the review period in days. The calculator extends the protection window beyond lead time so it reflects the extra demand exposure between inventory reviews.
8. When should I reorder immediately?
Reorder quickly when inventory position is below the reorder point, stockout probability is high, or the modeled shortage exposure threatens service commitments and margin.