Base Stock Insights Reorder points control prob of stockouts by establishing safety stock.
{"Image DocumentName": "Base Stock InsightsReorder points control prob of stockouts by establishing safety stock.", "Image ImageDescription": "To achieve a given fill rate, the required base stock level (and hence safety stock) is an increasing function of mean and (provided backorder cost exceeds shortage cost) std dev of demand during replenishment lead time. The optimal fill rate is an increasing in the backorder cost and a decreasing in the holding cost. We can use either a service constraint or a backorder cost to determine the appropriate base stock level. Base stock levels in multi-stage production systems are very similar to kanban systems and therefore the above insights apply. Base stock model allows us to quantify benefits of inventory pooling.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}