Just for Fun — a Safety Stock Quiz

This quiz is just for fun, but it’s more than just a quick spreadsheet-calculation exercise.

Inventory item XYZ needs to have its safety-stock level optimized. You can get all of the information you need for item XYZ at:

https://dl.dropboxusercontent.com/u/5975632/SS%20Quiz.docx (Word file) and https://dl.dropboxusercontent.com/u/5975632/SS%20Quiz%20Data.xlsx (Excel file).

As supply-chain/inventory-management experts, your skills and talents involve optimizing all facets of the supply chain. However, the specific focus of this quiz is safety stock, not inventory policy or overall supply-chain structure. Assume that XYZ’s parameters have been thoroughly analyzed and agreed-upon, and will not be changed for at least the next 12 months. The objective of this quiz is to determine XYZ’s optimal safety stock and resulting inventory position, not to propose different policies and parameters.

When you open those files, you may think I have provided too much information, but I want you to have sufficient detail to optimize XYZ’s safety stock level and inventory position. It’s up to you to determine what’s important and what’s not. This quiz is not simply a test of your ability to put values into a formula. On the other hand, some of the information has been simplified, to avoid being too stats-intensive.

I look forward to your answers to the quiz!