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Safety stock and reorder point
Buffer stock for a service level, and when to reorder.
Operations & supply chainLogistics & supply chainRetail & ecommerceManufacturing & IoT
How it's worked out
- SS = z × daily SD × √(lead time). ROP = demand × lead time + SS
- Normal demand; fixed lead time
NoteAssumes demand is roughly normal and lead time is fixed. Add lead time variation if suppliers are unreliable.
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