SUO_MGT4059_W1P_LaBeaux_S.doc.

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Apr 3, 2024

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1 Safety Stock and Reorder Point Starlynn LaBeaux MGT4059 March 24, 2024

2 Safety Stock and Reorder Point After collecting the Z score for each of the goods from the different Service Levels, we move on to calculate the necessary amount by using the following equation: Calculate z by subtracting the mean from X and dividing the result by the standard deviation (SD). z is obtained from the Z table and x represents the quantity. Average = average annual demand SD refers to the standard deviation. The reorder point may be calculated by adding the lead period demand and the lead time safety stock (X = Annual amount) to X (90%)/6 (X the Annual Quantity). This equation can be divided

3 by 6 to determine the quantity during the lead period. The reorder point may be calculated by adding the lead time demand to the lead time safety supply.

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