Calculate safety stock

The method used to calculate safety stock on a particular article. The method assumes that you have control over stock levels and ordering home materials when needed. There are only differences in the time from order to delivery, with the help of safety stock needs to upgrade itself against. Demand may be cited as D and the leadtime to LT. The safety factor, which determines the level of service you want to keep known as K., demand standard deviation is termed as σ. To calculate the safety stock apply the mathematical formula.

SL = K x D x σLT

To further calculate the reorder point use following mathematical formula.

BP = D x LT + SL

D = demand
LT = lead time
SL = Safety Stock