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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 and space and may lead to shrinkage and obsolescence while holding too little leads to backorders, production delays, expedited shipping, and unhappy customers. This course will explore inventory and purchasing concepts and review how to use data to glean insight about your products and establish a systematic approach to purchasing.

70 minutes
Course Exam
Certificate of Completion
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Why Lorman?

Over 37 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
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Why Lorman?

Over 37 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 Course

This course was last revised on May 18, 2022.

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

No Credit Available

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

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Why Lorman?

Over 37 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 e-commerce
  • 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 [email protected] or 954-302-6811
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Why Lorman?

Over 37 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.

All of your training, right here at Lorman

All of your training, right here at Lorman.

Pay once and get a full year of unlimited training in any format, any time!

  • OnDemand Courses
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  • Course Manuals
  • Executive Reports
  • White Papers and Articles

Additional benefits include:

  • State Specific Credit Tracker
  • All-Access Pass Course Concierge

Questions? Call 877-296-2169 to speak with a real person.

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Product ID: 409573
Published 2022
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