Calculate optimal reorder points for inventory items based on lead times, demand variability, and service level targets.
Help me calculate the optimal reorder point for our inventory. Here's the relevant data: Product/SKU: [Product name or SKU] Average daily demand: [Units per day] Lead time: [Days from order to delivery] Lead time variability: [Standard deviation in days] Demand variability: [Standard deviation of daily demand] Desired service level: [e.g., 95%, 99%] Current stock level: [Units on hand] Storage costs: [Cost per unit per day] Please calculate: 1. The reorder point using appropriate safety stock calculations 2. Recommended safety stock levels 3. Expected stockout frequency at this reorder point 4. Sensitivity analysis showing how different service levels affect safety stock 5. Annual holding cost implications
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