The optimal size of the safety stock is defined by the point where the?

The optimal size of the safety stock is defined by the point where the cost of holding additional inventory equals the cost of stockouts. This balance minimizes total inventory costs while ensuring service levels meet customer demand. It involves analyzing factors such as demand variability, lead time, and service level requirements to determine the appropriate safety stock level. Ultimately, the goal is to achieve a level of inventory that mitigates risks without incurring excessive holding costs.