Ques:- How do you calculate safety stock for consumption based planning ?
Asked In :-
Bobst India, Gharda Chemicals, Hindustan Unilever, JK Lakshmi Cement, PRAN-RFL, Pricol, Wheels India, Goodfood Market Corp, Akzo Nobel Worldwide, Godfrey Phillips India,
Right Answer:
To calculate safety stock for consumption-based planning, use the formula:
Safety Stock = Z * σL
Where:
- Z = Z-score (based on desired service level)
- σL = Standard deviation of demand during the lead time
You can also consider average demand and lead time variability in your calculations.
To calculate safety stock for consumption-based planning, use the formula:
Safety Stock = Z * σL
Where:
- Z = Z-score (based on desired service level)
- σL = Standard deviation of demand during the lead time
You can also consider average demand and lead time variability in your calculations.
