Understanding Automated Safety Stock Population (Release 9.2 Update)

Use the Automated Safety Stock Population program (R3425) to automatically calculate safety stock values, thereby maintaining optimal inventory levels to reduce stock-outs and excess inventory.

When the Automated Safety Stock Population program is run in final mode, Safety Stock (SAFE) values in the Item Branch file (F4102) are updated immediately with the calculated values. If you run the program in proof mode, the calculated safety stock values are written to the Safety Stock Message File (F3425). You can then use the Work with Safety Stock Messages program (P3425) to review and edit the automatically calculated safety stock values prior to update, as well as to manually enter safety stock for an item.

When you run R3425, the system calculates safety stock values using one of the following three formulas:

Buyer's Guide formula

With this formula, the system calculates the safety stock in this way:

Safety Stock = Square Root of [(Annual Sales / Number of Days in Year) x Lead Time Days]

Annual Sales is the total units of sales for the previous 12 months from the Item History table (F4115). These units are converted to the primary unit of measure for the item. The system retrieves the value for the Number of Days in Year from the Branch Plant Constants (F41001) file. If this value is missing in F41001, the system uses the default value of 365. The value for Lead Time Days is retrieved from the Average Lead Time (ALTD) field if established in the Supplier/Item Relationships file (F43090). Otherwise, the system retrieves it from the Level Leadtime (LTLV) field in the Item/Branch file (F4102).

Note: If no lead time is established in either the Supplier/Item Relationships or Item/Branch tables, the system will use a default value of 1 day.

Specified Days of Demand formula

This formula calculates the demand per day and multiplies that by the value specified in the Safety Stock Days of Demand processing option. This formula can use either item ledger data or MRP data for calculating the demand per day.

Specified Percentage of Leadtime Demand formula

This formula calculates the demand per day and multiplies that by the days defined in the Level Leadtime field of F4102 and the value in the Safety Stock Percentage of Leadtime Demand processing option. This formula can use either item ledger data or MRP data for calculating the demand per day.

Note: If this value is blank in F4102, the system takes the default value of 1 day.