Work out supplier lead time variability instantly with clear inputs, formula shown and shareable results.
When lead time is the variable element, safety stock is the service factor multiplied by average daily demand and the standard deviation of lead time. The coefficient of variation classifies supplier reliability, and above 0.30 the inventory cost of the variability usually justifies dual sourcing.
Safety stock
SS = z x Average daily demand x Standard deviation of lead time
Reorder point
ROP = Average daily demand x Average lead time + Safety stock
Coefficient of variation
CV = Standard deviation / Average lead time
Because safety stock scales directly with it. Halving lead time variability halves the safety stock needed for the same service level.
Usually yes. Consistency lets you plan; variability forces you to hold inventory against the worst case.