Calculation of safety stock in 1 month consumption
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Customs duty assessable value is the total of:
CIF value of item in local currency. This is the sum of total FOB item value, freight, insurance, and other charges.
Landing charges. This is 1 percent of the CIF item value. The user can change this amount on the BOE.
Any previously applied customs duties.
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Safety stock = Z-score x standard deviation of lead time x average demand. For example, if aiming for a Z-score of 1.65, with average demand constant at 20 units per month, and lead times over a six month period being 2, 1.5, 2.3, 1.9, 2.1, and 2.8 months, then Safety Stock = 1.65 x .43 x 20 = 14.3 units.
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