Inventory Management: Safety Stock Calculation and Control

This MBA style course prepares and empowers you to calculate and control your Safety Stock. A crucial area of Inventory Management. The eternal question: How to balance the risk of stock-outs with the quantity of safety stock inventory held.

We cover 3 methods to calculate your Safety Stock - from super simple to advanced statistics:Method 1: Number of Days of Safety - A fast and very basic method to get a quick decision Method 2: HiHi-AvAv (my own name for a very established method ;) Finding the difference between our high "Lead Time Demand" and the average to determine the level of cover we want from periods of high demand during a slow replenishment lead time. Method 3: Statistical Method - The most rigorous method. We model our "Lead Time Demand" as a "Normal Distribution", determine our desired "Service Level" (acceptable risk of a stockout) and use a little help from some excel formulas to calculate our required Safety Stock and Re-Order Point quantity.

Course Sections:1. Inventory Control Introduction 2. Safety Stock Background 3.

Inventory Dynamics4. Simple Safety Stock Calculations5. Calculating Safety Stock using Statistics6.