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Setting Safety Stock
Inside this lesson
- Compute safety stock as SS = z x sigma_d x sqrt(L).
- Combine cycle stock and safety stock into ROP = d x L + SS.
- Show how a higher service level or a longer lead time raises the reorder point.
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Educational content only. This course explains inventory and working-capital control concepts and the math behind them; it is not financial, accounting, investment, or professional certification advice, makes no recommendations, and predicts no cost, cash, or business outcomes. All figures are illustrative synthetic teaching examples. Consult a qualified professional before making financial or business decisions.