Reorder point and safety stock

Demand and supply (one time unit, for example weeks)

Average demand per week (units) Std deviation of weekly demand (units) Lead time (weeks) Std deviation of lead time (weeks, 0 if fixed) Service level (%)

Stock today (units)

On hand Allocated to jobs On order (not yet received)

Measure	Value

All starting numbers are invented for illustration, not benchmarks. Formula: safety stock = z x square root of (lead time x demand variance + demand squared x lead-time variance); reorder point = demand during lead time + safety stock. It assumes demand and lead time are roughly normal and independent. Inventory position = on hand - allocated + on order. Entries accept 12,500 or 0,5; a value such as 1.000 is ambiguous and is rejected, so write 1 or 1000.