Using Coefficient of Variation as a Guide for Safety Stocks

In one of my previous posts, I wrote about using coefficient of variation (CV) as a predictor of forecastability. In this post, I will talk about how it can be used to indicate a sensitivity of lead time towards the safety stock calculations. To quickly remind the reader first: The formula for CV = StdDev

Cycle Service Level Versus Fill Rate Service Level – Part One

Most businesses would put high customer service as one of their top business priorities. While there are many different things that make up the overall customer experience, one of the key performance indicators (KPIs) that companies measure is the timely delivery of goods to the customer. In safety stock calculations, this is typically an input

By |2021-08-30T10:48:58-04:00September 15th, 2015|Inventory Management, Safety Stock|

Eliminating Some Of The Safety Stock Mystery

In the simplest inventory situation, the only variability is in the quantity of demand for a single day.  There is no trend up or down or seasonal effect. The demand today is independent of the demand for tomorrow.  Additionally, we will assume replenishment time is zero.  That is when we place an order for additional

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