Which data is required to determine safety stock in automatic reorder point planning?

To determine safety stock in automatic reorder point planning, it is essential to consider several important factors that ensure the inventory levels can effectively meet demand without resulting in stockouts.

Mean absolute deviation is a measure of forecast accuracy; it quantifies the variability in the demand or the lead time. This statistic is crucial because it helps in understanding how much stock is required to cover fluctuations in demand during the lead time.

The service level is another critical factor; it represents the desired probability of not facing a stockout during the lead time. A higher service level means that more safety stock is typically required, as it ensures a greater likelihood of meeting customer demand without interruption.

Replenishment lead time, which is the time taken from reordering stock to replenishing it, also plays a vital role. It provides the timeframe during which demand will need to be met, indicating how much stock should be kept on hand to bridge the gap between reorder and delivery.

Since each of these elements contributes to accurately calculating safety stock levels, their collective importance means that all of them are necessary to effectively utilize automatic reorder point planning. This makes the selection that includes all the data points the most comprehensive and correct choice for determining safety stock.