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How can we decide safety stocks level for fast moving items to avoid delivery failure?

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Question added by Vinu C Pillai , SENIOR BUYER , KYE INTERNATIONAL
Date Posted: 2017/03/22
Moustafa Abouelsaad
by Moustafa Abouelsaad , Procurement & Logistics Director , Al-Kharafi Construction, Kuwait

Thanks for the invitation,

Safety stock is the buffer stock which will cover any shortage or delay in delivery process or any unexpected unusual demand, therefore we should consider the following Factors while calculating the Buffer stock of any item:

  • Ordering cycling period for that particular item
  • Delivery lead time
  • At least last three months Consumptions
  • Seasonal Products
  • Sales Forecast or Production Plan.
  • Our Storing capacity.
  • Item lifetime

Mohammed Awad
by Mohammed Awad , Regional Supply Chain & Operations Director , Tamakkon Co.

A safety stock is a safety stock,  You will need know the cycle of the item (daily withdraw) as well for the time of a new delivery from order point and make the calculation.

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