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Service Level vs. Cost
Inside this lesson
- Compute safety stock as SS = z·σ_L using the service-level z-table.
- Compute the annual carrying cost of safety stock as z·σ_L·h.
- Explain why raising the service level raises cost, and steepest near 99%.
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Educational content only. This course explains inventory and working-capital control concepts and the math behind them; it is not financial, accounting, investment, or professional certification advice, makes no recommendations, and predicts no cost, cash, or business outcomes. All figures are illustrative synthetic teaching examples. Consult a qualified professional before making financial or business decisions.