How this calculator works
Simple days-of-stock rules may miss real supply uncertainty. The variance in daily sales and how much delivery dates slip can both materially affect the buffer that protects a product from stockouts.
What the calculation does
Choose a normal-distribution service level and enter measured daily demand, its standard deviation, the average supplier lead time and its standard deviation. This estimates variance across lead time.
Important limitations
A normal approximation that assumes demand and lead time are independent and reasonably stationary. Cycle service level is not fill rate; actual shortages can happen.
Common questions
What is cycle service level?
The target fraction of replenishment cycles without stockouts, assuming the statistical model holds.
What if lead time is fixed?
Set its standard deviation to zero to use the demand-only safety-stock model.
How do I estimate variability?
Analyze representative historic daily sales and actual supplier arrival times, excluding data distorted by prior stockouts where possible.