Safety Stock Optimizer

“Add stock only when it adds value!” Retalon’s Safety Stock optimizer calculates the necessary safety stock quantity for each product individually based on associated risks (such as volatility of demand, variability in Lead Time, Vendor Fill Rates), an accurate forecast, and company policies (such as desired Customer Support Level)

Optimize Safety Stock Levels

Set safety stock targets based on product performance & desired customer service level

Account for Vendor Lead-Time Variability

The system automatically optimizes safety stock to account for volatility in demand, and variability between declared and actual vendor lead-times

Reduce Warehouse Inventory Costs

Avoid bringing additional products that have a low chance of selling and lead to overstocks

Protect your best products

Ensure a maintained optimal In-Stock % on your best performing products

Powered by Predictive Analytics

Retalon's planning solution is powered by predictive analytics to provide accurate demand forecasts

End-to-End Integration

All Retalon solutions are fully integrated in a common predictive analytics platform.

In order to maintain the right amount of inventory retailers need to account for product sales volume, procurement intervals, lead-time, and other factors. These factors, however, constantly fluctuate, which may result in lost sales when inventory goes below required levels. In order to protect their businesses from lost sales retailers order additional inventory. This additional inventory is called safety stock.

 

On the other hand, ordering too much of extra stock (especially for products that don’t perform well) results in higher costs that may not be recovered. This is why finding optimal safety stock levels is critical. Calculating optimal safety stock is not a trivial task. Every SKU is affected by multiple factors including:

 

Retalon system calculates optimal safety stock based on:

 

  • Variability of Demand
  • Reliability of Lead Time
  • Desired Service Levels
  • Products Contribution Codes
  • Sales Trends and Seasonality
  • Current Inventory Standing
  • Corporate Policies and Regulations
  • Replenishment (re-order) Rules
  • Capacities and Restrictions

 

The possible restrictions include:

 

  • Restriction on safety stock that are based on a comparison of the total cost of safety stock VS. the cost of lost sales
  • Maximum safety stock allowed, compared to a percent of maximum sales in the previous year(s)
  • Restrictions that are based on the facility/shelf capacities
  • Restrictions that are based on the existence of substituting products
Schedule a personalized demo of Retalon’s Safety Stock Optimizer!