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Best Practices for Calculating Safety Stock and Service Levels

Understand the power of safety stock and how to calculate it.

How do you know when there is enough inventory to meet demand? When is the right time to buy? How much should be purchased? Holding too much inventory consumes cash, space and may lead to shrinkage and obsolescence, while holding too little leads to back orders, production delays, expedited shipping and unhappy customers. In this topic we will explore inventory and purchasing concepts, how to use data to glean insight about your products and how to establish a 'systematic approach' to purchasing.

Runtime: 88 minutes
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Why Lorman?

Over 31 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Inventory - Review

  • Classifications and States (Raw, Wip, Finished)
  • Valuation Methods (FIFO, Average, Actual)
  • Effects on Balance Sheet and Income Statement

Inventory Usage Patterns

  • Continuous vs. Spot
  • Seasonal
  • Trends
  • New and Discontinued SKUs

Service Level

  • Overview
  • Order Fulfillment History
  • Orders Never Entered

The Trade-off: Inventory on Hand vs. Service Level

  • How to Keep Service Levels High Without Increasing Inventory

A Systematic Approach Using Reorder Points

  • Reorder Point = Lead Time Demand + Safety Stock
  • What Is Lead Time?
  • Order Interval and How Does It Affect Lead Time?
  • Determining Demand
  • Demand Variation and How It Affects Service Level
  • How Does Service Level Affect Safety Stock?
  • Maximum or Order up to Quantity
  • Order Quantity

Conclusion

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Why Lorman?

Over 31 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Webinar

This course was last revised on February 22, 2018.

Call 1-866-352-9540 for further credit information.

  • ISM 1.5
     
  • Participants who successfully complete this program will receive 1.5 hours of continuing education. They may be applied toward ISM CPSM, CPSD or C.P.M. recertification. ISM's consent to approve hours for this educational event is not an endorsement of this program or its content by ISM.
     

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

Audio & Reference Manual

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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More Program Information

Why Lorman?

Over 31 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Ian Benoliel

Ian Benoliel

NumberCruncher.com, Inc.

  • Founder and president of NumberCruncher.com, Inc.
  • NumberCruncher is a developer of inventory and orders management software for product centric SMBs in manufacturing, wholesale and ecommerce
  • Has held positions in technology and accounting firms
  • CPA, University of Illinois; CA designation, the Institute of Chartered Accounts of Ontario; B.B.A. degree, York University’s Schulich School of Business
  • Can be contacted at ianb@numbercruncher.com or 954-302-6811
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Why Lorman?

Over 31 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 400218
Published 2018
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