Daily demand (average) Standard deviation of Demand = Length of replenishment cycle (average) = Standard deviation of Replenishment Cycle = Reorder Point without Variability= Safety Stock (to buffer from variability) = Reorder Point (in the real world!) = Unit Cost of items in inventory = Inventory carrying cost rate = DD = How much does it cost to hold just the Safety Stock for one year? ODD = RC = Service level target= Z= ORC SS= ROP = I= S C= 85.81 units/day 9.453 units/day 12.89 days 1.269 days 96% units units units (round to the nearest unit) 15.00 per unit 32% per year per year Daily Demand (units) 90 85 75 60 78 83 95 93 Historical Data 95 94 92 83 90 85 95 80 Length of each replenishment cycle (days) 12 12 11 13 15 14 13 12 14 Extra: How much more would it cost to increase Safety Stock to reach a 97% Service Level? To reach 99% Service Level?