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About Safety Stock Formula & Calculation - AbcSupplyChain
This document discusses different methods for calculating safety stock levels. Safety stock is inventory held to mitigate risks from uncertain demand and lead times. The summary discusses three main calculation methods: 1. A basic method of holding a set number of days' worth of average sales as safety stock. 2. An "average-max" method that calculates safety stock as the difference between maximum sales/lead time and average sales/lead time. 3. Methods using a normal distribution to predict demand and calculate a safety stock level to achieve a target service level based on product characteristics and risk. The document provides examples of each method.
Detailed Information
| Author: | ['Fattabiouni'] |
|---|---|
| Publication Year: | 2021 |
| Pages: | 19 |
| Language: | English |
| Format: | |
| Price: | FREE |
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