Katana

When using AI Replenishment, it will attempt to calculate ideal safety stock for the SKU(s) you're analyzing.

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Safety stock is the maximum of three qualifiers, rounded up to the nearest whole unit:

Statistical: Z × forecast_error × daily_demand × √(lead_time + 7), where Z = 1.65 (95th percentile service level)

Poisson: Z × √(lead_time × daily_demand) — used for low-volume / lumpy demand (less than 1 unit/day)

7-day floor: 7 × daily_demand — practical minimum buffer ensuring at least one week of typical demand as a safety net

1. Statistical: Z × forecast_error × daily_demand × √(lead_time + 7), where Z = 1.65 (95th percentile service level)
 
2. Poisson: Z × √(lead_time × daily_demand) — used for low-volume / lumpy demand (less than 1 unit/day)
 
3. 7-day floor: 7 × daily_demand — practical minimum buffer ensuring at least one week of typical demand as a safety net

If the AI recommends a different safety stock level than the one currently set in Katana, an Update in Katana button appears on the results screen. Clicking it will automatically update the safety stock.

Your feedback is invaluable. Let us know your thoughts on this article or anything in Katana you'd like to see improved: <a href="mailto:support@katanamrp.com" rel="nofollow noopener noreferrer" target="_blank">support@katanamrp.com</a>

Understand the formula and recommendations used by AI Replenishment

AI Replenishment's safety stock formula and recommendations

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AI Replenishment's safety stock formula and recommendations

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