In a nutshell: Safety stock factor

The safety stock factor is a multiplier that can be found in some ERP and inventory management systems. This multiplier can be used to increase or decrease a calculated or manually set safety stock as a percentage. The safety stock factor can help with items that either do not regularly reach their target readiness for delivery or, conversely, exceed the required readiness for delivery. With a safety stock factor greater than 1, the safety stock can be increased and reduced with a value below 1.

Our tip:Be extremely careful with the safety stock factor. It should only be used in exceptional cases, as it is extremely difficult to adjust by hand.

Occasionally, the safety stock factor can help to move from a manually set safety stock to a statistically calculated safety stock if the company has reservations about a statistically calculated safety stock. In this case, the safety stock factor can be used to approximate the calculated safety stock to the safety stock set manually. The advantage of this compromise solution compared to a completely manually set safety stock is that it is at least automatically readjusted and not forgotten. However, if a statistically determined safety stock fluctuates greatly from calculation to calculation, the safety stock factor dampens or increases this effect.

Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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