Replenishment Strategy Based on Historical Data and Forecast of Safety Stock

One of replenishment strategy that can be used to
reduce stock out occurrences on fulfilling customer demand is
safety stock. Safety stock generally influenced by supplier or
manufacturing lead time, service level, and standard deviation.
This research calculates and analysis the safety stock is between
forecast data and historical data. ABC/FMR classifications help
to give information to the company whether parts need to have
stock or not. The result shows that safety stock based on
historical data is better than safety stock based on forecast
data. It is because safety stock based on historical data can
describe the erratic demand than based on forecast data. Safety
stock based on forecast data cannot be used because it has the
low percentage of forecast accuracy. Based on ABC/FMR
classification, several parts are suggested to have stock because
has the highly frequent demand and several parts are suggested
to have non-stock.