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Z-Score in inventory forecasting is a statistical measure representing how many standard deviations a data point is from the mean demand. It is used to calculate safety stock levels by quantifying demand variability and service level targets. By applying Z-Scores, supply chain managers can set inventory buffers that balance the risk of stockouts against carrying costs. This quantitative approach improves the accuracy of inventory optimization models under uncertainty. 

 

 

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Z-Score (in Inventory Forecasting)