Supply Planning Statistical Safety Stock Calculation
Hello,
Need to understand how Statistical Safety Stock Calculation works.
The safety stock based on MAD is calculated by the following equation:
SS = Z × (1.25 × MAD × √LTb)
I have 2 question here :
- How we can arrive at the value of Z. as per definition its says Z: Number from the normal distribution probabilities corresponding to the service level specified by the user
- Also i am seeing the MAD value for my Item/Org combination is 7 in Demand Plan. But the MAD value showing after plan run in simulation set is 42 in Supply Plan. Need to understand why this difference ?
Request if you can share your experience.
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