Inventory & Performance
Safety Stock & Reorder Point
Estimate safety stock and reorder point from demand variability, lead time and selected service-level assumptions.
Note: Assumes demand standard deviation is measured per day and lead time is in days, with stable lead time and an approximate normal-demand model. It does not include lead-time variability.
Formula
SS = z × σ × √lt. ROP = (avg × lt) + SS.
FAQs
Service level?
95% common start.