Use total replenishment lead time
Lead time can include production, quality checks, export preparation, international freight, customs, receiving, and fulfillment-center availability. Using only factory production time creates a reorder point that reacts too late.
Calculate available inventory carefully
- Start with sellable on-hand inventory.
- Add inbound units only when their timing is supportable.
- Subtract reserved, unfulfillable, or otherwise unavailable units.
- Subtract committed demand or planned promotion volume.
- Compare the result with expected demand during lead time plus safety stock.
Set safety stock from actual uncertainty
Safety stock should reflect demand and lead-time variability, service goals, product margin, and cash constraints. High uncertainty or a costly stockout can justify more coverage, while slow or aging inventory may require less.
Review the inputs after every replenishment
Compare planned and actual production, transit, receiving, and sales. Update the model when the process changes rather than keeping a safety-stock number that no longer matches the operating risk.