Work out lead time demand instantly with clear inputs, formula shown and shareable results.
Lead time demand is what you expect to sell while a replenishment order is in transit. Adding safety stock sized as z times the demand standard deviation times the square root of lead time gives the reorder point that protects your chosen service level.
Lead time demand
LTD = Average daily demand x Lead time (days)
Safety stock
SS = z x sigma_daily x sqrt(Lead time)
Reorder point
ROP = LTD + Safety stock
1.28 for 90%, 1.65 for 95%, 2.05 for 98% and 2.33 for 99% cycle service level.
Daily demand variations are independent, so variance adds over the lead time and standard deviation grows with the square root of the number of days.