What is the definition of (set size, installed quantity)? And how they can be used to calculate the appropriate stock levels?

Thanks for your participation, 

The Set Size is the number of spear parts that should be changed in every maintenance. E.g. for changing the tires of a car, usually the4 tires will be changed unless there is special case forced you to change only one of them.

So the set size here will be4.

The Set size will affect the Minimum stock since at least you should keep a complete set that will be enough for completing the maintenance.

The installed QTY is the number of parts already installed in plant and functioning not including the stored parts. For the same example above, the installed QTY for normal car is4 regardless of how many spear tires you have.

The installed QTY will give indication for the Maximum level.

However, there are more parameters that will lead to determine the Min and Max in addition to the above.

Sets are mostly using for the mechanical spare parts, person who is counting the material must familiar with all machine parts which is coming under sets.