<P> Safety stock term used by logisticians to describe a level of extra stock that is maintained to mitigate risk of stockouts (shortfall in raw material or packaging) due to uncertainties in supply and demand . Adequate safety stock levels permit business operations to proceed according to their plans . Safety stock is held when there is uncertainty in demand, supply, or manufacturing yield; it serves as an insurance against stockouts . </P> <P> Safety stock is an additional quantity of an item held in the inventory in order to reduce the risk that the item will be out of stock, safety stock act as a buffer stock in case the sales are greater than planned and / or the supplier is unable to deliver the additional units at the expected time . </P>

When would a company consider adding safety stock to their inventory levels
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