How to calculate Standard Deviation of Lead Time?

Question

I am trying to calculate safety stock whose formula as goes below:
Safety Stock:
{Z * SQRT (Avg. Lead Time * Standard Deviation of Demand ^2 + Avg. Demand ^2 * Standard Deviation of Lead Time ^2}.

I have all the inputs except standard deviation of lead time... can any1 help me out with this?

Answer 1

Because you have used that to measure the average lead time it suggests that you should have the sample data of the historic lead time. Take the standard deviation from that data.



Also please tell how many samples do you have for the lead time. If the sample size is >30 then lead time is a good way to measure safety stock.

Answer 2

Standard Deviation Of Demand

Answer 3

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RE:

How to calculate Standard Deviation of Lead Time?

I am trying to calculate safety stock whose formula as goes below:

Safety Stock:

{Z * SQRT (Avg. Lead Time * Standard Deviation of Demand ^2 + Avg. Demand ^2 * Standard Deviation of Lead Time ^2}.



I have all the inputs except standard deviation of lead time... can any1 help me out with this?

Answer 4

STDEV assumes that its arguments are a sample of the population. The standard deviation is calculated using the "unbiased" or "n-1" method. STDEV uses the following formula: squar root of((sum of(x- x bar)^2)/(n-1)) where x is the sample mean AVERAGE(number1,number2,…) and n is the sample size.

Answer 5

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Answer 6

Can you give more details?