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Supply Planning Statistical Safety Stock Calculation

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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 :

  1. 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
  2. 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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