inputs
units/day
units/day
days
days
days
$/unit
continuous review
safety stock
—
units
reorder point
—
units
days of supply
—
days
avg inventory
—
units
inventory value
—
USD
inventory level simulation — 90 days
service level sensitivity
| service level | z-score | safety stock | reorder point | inventory value |
|---|
formula reference
continuous review safety stock
SS = Z × √(LT × σ_d² + d² × σ_LT²)
Z = service level z-score ·
LT = average lead time (days) ·
σ_d = demand std dev (units/day) ·
d = average daily demand ·
σ_LT = lead time std dev (days)
periodic review safety stock
SS = Z × √((LT + R) × σ_d² + d² × σ_LT²)
R = review period (days) · all other variables as above
reorder point
ROP = d × LT + SS (continuous)
ROP = d × (LT + R) + SS (periodic)
ROP = d × (LT + R) + SS (periodic)
Trigger a replenishment order when on-hand inventory falls to the reorder point.
average inventory & value
Avg Inventory = SS + (d × LT / 2)
Inventory Value = Avg Inventory × unit cost
Inventory Value = Avg Inventory × unit cost
Cycle stock estimated as half the average order quantity (demand × lead time). Average inventory = safety buffer + half the cycle.