A planned level of Inventory to be held in the warehouse to protect against acceptable levels of variation in Supply or Demand (only in cases where demand is bigger than the forecast) and to protect against a “stock out”, i.e. the inability to complete a sale because of a Zero stock position. Its purpose is to prevent disruptions in manufacturing (changes in production schedules, backlog or over-planning) or customer deliveries (forecast error). Safety stock can be maintained at finished goods level, but also at component / raw material level