Summary
This article walks through how sporadic safety stock is calculated.
Applies To
Sporadic Safety Stock is used for items that are determined to have a Sporadic Usage Pattern. Highly Seasonal items are not allowed to use sporadic SS
Process
Detection of when an item is sporadic is determined by the limits and values in the Global Inventory Limits screen -- there are some recommended values we suggest you use for that.
This method uses statistical methods to determine the distribution of sporadic demand on a product, and recommend a safety stock that will cover you for the expected sporadic demands over the lead time of the product, based on that distribution.
In broad terms, it does this by repeatedly sampling the available data and generating an implied distribution of data points, then calculating a safety stock based on that generated distribution.