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Calculate both the reorder point before safety stock and

Calculate both the reorder point before safety stock and the safety stock requirement you will add to the reorder point for a 99.9% customer service level (99.9% CSL = 3σc). X = D(T) 2 σC = T(σD) + D (σT)

Average lead time (performance cycle time) in days = 5

Standard deviation of lead time (performance cycle time) in days = 2

Average daily demand = 100

Standard deviation of daily demand = 10

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Accounting Basics: Calculate both the reorder point before safety stock and

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Accounting Basics: Calculate both the reorder point before safety stock and

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