Reorder Point with Safety Stock Compute the necessary items below to find WHEN to order! But what if demand isn't constant? But what if delivery isn't reliable?? Daily demand (average) DD = units/day Historical Data Standard deviation of Demand = units/day Daily Demand (units) Length of each replenishment cycle (days) 90 12 Length of replenishment cycle (average) = RC = days 85 12 Standard deviation of Replenishment Cycle = days 75 11 60 13 Service level target = 96% 78 15 z = 83 14 95 13 Reorder Point without Variability = units 93 12 + 95 14 Safety Stock (to buffer from variability) = SS = units 94 = 92 Reorder Point (in the real world!) = ROP = units 83 (round to the nearest unit) 90 85 Unit Cost of items in inventory = I = $15.00 per unit 95 Inventory carrying cost rate = C = 32% per year 80 How much does it cost to hold just the Safety Stock for one year? per year