푻풐풕풂풍 푨풏풏풖풂풍 푪풐풔풕= (^) {(
퐸푂푄
2
) 푥 퐻}+ (^) {(
퐷
푄
) 푥 푆}
푇풐풕풂풍 푨풏풏풖풂풍 푪풐풔풕= {(
퐸푂푄
2
) 푥 퐻 }+ {(
퐷
푄
) 푥 }
푇표푡푎푙 퐴푛푛푢푎푙 퐶표푠푡=
Calculating Safety Stock
Determine safety stock (predictable usage).
Predictable usage safety stock =
(max lead time- normal lead time) x normal consumption rate
where:
푵풐풓풎풂풍 풄풐풏풔풖풎풑풕풊풐풏 풓풂풕풆=
푒푥푝푒푐푡푒푑 푎푛푛푢푎푙 푢푠푎푔푒
365
Materials Management Metrics
Turnover ratio = A measure of the number of times a company's inventory is
replaced during a given time period (turns per year)
Percent of inactive inventory = # inactive items (SKU) divided by total items
issued
Inventory variance (inaccuracy) = difference between actual and inventory
record
Service Level = Percentage of orders satisfied
Inventory shrinkage rate = cost of items lost through deterioration,
obsolescence theft etc. divided by the total inventory cost