Safety stock is the buffer of extra inventory kept on hand to ensure that a company can continue to meet its customers’ demands even in the event of unexpected spikes in demand, supply chain disruptions, or other unforeseen circumstances. The purpose is to mitigate the risk of stockouts, which can result in lost sales, frustrated customers, and other negative consequences. By having it in place, a company can ensure that it always has the inventory it needs to meet customer demand, even in unpredictable or challenging circumstances.