Safety stock: it is a buffer stock to prevent uncertain factors of future material supply or demand (such as a large number of sudden orders, unexpected interruption or sudden delay in delivery, etc.). ). Its size depends on the uncertainty of supply and demand, customer service level (or order satisfaction rate), shortage cost and inventory holding cost.

Minimum inventory: the minimum inventory refers to the minimum inventory quantity that should be stored in the warehouse. Below this amount, there may be a shortage of inventory, which will affect the normal production of enterprises.

Maximum inventory: the maximum inventory, also known as "maximum reserve quota", is the upper limit standard set by enterprises to control material inventory.

Extended data:

1, minimum inventory calculation formula-

Minimum inventory (finished product) = minimum daily output × longest delivery days+safety factor/day.

Minimum inventory = safety inventory+purchase lead time consumption.

Minimum inventory = daily sales * arrival days+safety factor/day.

2. Maximum inventory calculation formula-

Maximum reserve days = supply interval days+preparation days+insurance days.

Maximum storage = average daily consumption × maximum storage days. When the inventory of a certain material reaches or will exceed this limit, it is necessary to suspend purchasing. The excess constitutes the excess reserve.

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