Safety Stock - A quantity of planned stock that provides safety against stocking-out due to unforeseen demand or risk. Otherwise known as planned dead stock. There are 5 inputs to calculating the level of safety stock, 2 are referred to as the sources of risk and they are Supply risk and Forecast risk, and the remaining 3 are referred to as risk multipliers, and they are Target Fill Rate, Replenishment Cycle and Leadtime
Selling Price - The price to be used to determine the average value of sales at selling price and to determine the level of margin made on an item. Selling price and Margin can be used in the classification settings.
Stock Item - An item held in inventory for the purpose of meeting immediate sales demand.
Stock-Out - An item where its net stock position is currently zero or less. Action over and above ordering based on the lead time is required to prevent further lost sales. The Stock-out value is defined as the value of sales that will be lost from now until sufficient stock arrives to raise the net stock position above zero.
Surplus Orders - An item where the arrival of the open and outstanding purchase orders will result in the net stock position being greater than the order-up-to or maximum stock level. The value of Surplus orders will be the portion of the order resulting in the net stock position exceeding the order-up-to level.
Supply Performance - The measurement of supply based on whether the vendor over or under delivered in terms of quantity.
Supply Risk - The percentage risk calculated due to a supplier delivering early or late based on historic deliveries.