The Reserve for Obsolete Inventory #225 – Posted in: Bookkeeping

Safety stock and cycle stock are essential concepts when it comes to replenishment models. Here, by replenishment models, we mean an approach where you set target safety stocks and order quantities, along with a re-order level. In replenishment models, you need to calculate target safety stock to handle expected variability in demand up to a defined service level. In general, replenishment is an underutilised resource, since many people find variability a difficult concept to factor in…