I'm struggling to distinguish the real difference ...
# generalm
Mika Hakkinen
10/21/2022, 1:46 PMI'm struggling to distinguish the real difference between Preferred Stock Level, and Safety Stock Level. If for example, I always want about 50 of Item A in stock, and I want a purchasing suggestion to appear on Order Items when I have 5 or less of item A in stock. So which field do I populate here, the Preferred Stock Level or Safety Stock Level? And why that and not the other?
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matt_fuss
10/21/2022, 2:17 PMIf you always want 50 of item A in stock, then that is your safety stock. You set a reorder point knowing that you always want 50 in stock. So if it takes you 10 days to receive item A from a PO, and in those 10 days you sell 1 unit per day, your reorder point should be 60.
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Mika Hakkinen
10/21/2022, 2:20 PMSorry I meant Safety Stock Level and Preferred Stock Level, whats the different between those 2?
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matt_fuss
10/21/2022, 2:32 PMThe safety stock is the amount you always want to have on hand no matter what. The PSL is the ideal quantity you want to have on hand (minus the safety stock) to fulfill your daily demand
matt_fuss
10/21/2022, 2:35 PMSo if you want 50 units of A in the safety stock, and you need 10 days to receive it on a PO, and you sell 1 units per day, your reorder point might be 60, but your preferred stock level is 110
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