Safety Stock Formula

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This guide by Zoho is a great run-through of how to avoid putting yourself in an ‘out-of-stock’ situation by reviewing the calculations of the safety stock formula.

Re-order point is a fantastic tool for inventory control. It helps you to order items at the right time, which not only is a systematic approach but also, a good measure to cut down on the holding cost.
Zoho Inventory helps you to set re-order points for different items. Attach a re-order point based on the past trend and get notified automatically when the stock level reaches this point.

Here is the table of contents for this guide:

    • John’s dilemma
    • Calculating the average demand
    • Finding out the variability in demand
    • Determining lead time and its variability
    • Assigning Z-Score
    • Calculating the re-order point
    • Automate re-order point notifications

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With a background in Operations Research and Data Analysis, Lucas is a Brazilian programmer that likes to get stuff done quickly and reliably. In previous jobs, he implemented industrial job scheduling, fleet management and detailed long-haul route optimization – among other data-driven processes – to reach objectives of increased profit and reduced wasted resources. His goal is to make Zoho fully automated and with more meaningful data for spot-on decisions.