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Dynamics 365 Community / Forums / Supply chain | Supply Chain Management, Commerce / Safety stock calculation
Supply chain | Supply Chain Management, Commerce
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Safety stock calculation

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Posted on by Andrea Serramondi 97

Hello everyone,

Can someone please indicate the official algorithm for the standard calculation of safety stock in D365 F/O?

Thank you!

Categories:
Dynamics 365 Supply Chain Management
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  • Verified answer
    Holly Huffman Profile Picture
    Holly Huffman 6,538 Super User 2025 Season 2 on at
    Good morning, afternoon, or evening :) depending on your location!
     
    Safety stock in Dynamics 365 Finance & Operations (D365 F/O) is calculated based on demand fluctuations and lead times to prevent stockouts. The standard calculation follows this formula:
     
    Safety Stock Formula
    [ \text{Safety Stock} = (\text{Maximum Daily Usage} \times \text{Maximum Lead Time}) - (\text{Average Daily Usage} \times \text{Average Lead Time}) ]
     
    Key Factors in D365 F/O Safety Stock Calculation
    1. Historical Demand – The system analyzes past transactions to estimate daily usage.
    2. Lead Time Variability – It considers supplier lead times and potential delays.
    3. Master Planning Engine – The system generates planned orders when inventory falls below the safety stock threshold.
    4. Safety Stock Journal – Used to update minimum coverage based on historical usage.
    5. Pegging Options – Determines whether planned orders prioritize customer demand or safety stock replenishment.
     
    Hope this helps!
  • Andrea Serramondi Profile Picture
    Andrea Serramondi 97 on at

    Hi Holly,

    Thank you so much for your reply; it's very useful!

    Could you please clarify where the system sources the data for the formula?

    For instance, regarding "Maximum Daily Usage," where can I find this data? I would like to reach the tables where the data are written if possible

    Is this data manually entered by users in specific fields of the database, or is it calculated automatically by the system?

    Thank you in advance for your help.

    Kind regards!

     

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