In it’s entry on Safety Stock, Wikipedia states that some of the more common reasons for safety stock include:
# Supplier may deliver their product late or not at all
# The warehouse may be on strike
# A number of items at the warehouse may be of poor quality and replacements are still on order
# A competitor may be sold out on a product, which is increasing the demand for your products
# Random demand (in reality, random events occur)
# Machinery Breakdown
# Unexpected increase in demand
There are many reasons and methods for calculating safety stock, (more…)
Tags: inventory analysis, inventory control, MRP, problem solving, production control, safety stock, SCM, supply chain
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