Oracle Inventory uses item safety stocks in the reorder point planning process. Safety stock is a floor or base level of inventory from which Oracle Inventory performs all planning. In other words, the item is planned as if the safety stock quantity for the period is the zero inventory balance of the item. This ensures that the safety stock quantity remains in inventory to cover any fluctuations in demand.

In businesses such as aerospace and defense manufacturing, or construction, it is normal to segrate supplies and demands by inventory ownership. Safety stock definition in such environments can be project specific.

You can enter your own safety stock quantities or let Oracle Inventory calculate them based on an existing forecast for the item.

   To define your own safety stock quantities or modify quantities Oracle Inventory generated for you:

1. Navigate to the Enter Item Safety Stocks window. The Find Item Safety Stocks window appears.

2. Choose New to display the Enter Item Safety Stocks window. The Safety Stock Method field displays User-defined quantity.

3. Enter the inventory item for safety stock specification. You can use the Find window to locate items by effective date, forecast, category set, and category.

   Optionally, you can enter a default item. This is useful if you are entering multiple safety stock values and effective dates for the same item. See: .

4. Enter the Project if applicable.

   You can enter a project only if the organization is classified as a project manufacturing organization. The list of projects includes only those that have been enabled in Project Parameters for that organization. See Defining a Project.

5. Enter the Task if applicable.

   If you want to maintain the safety stock at the task level, you must define the task and associate it with the project you selected in the previous step. See Project Manufacturing Parameters.

6. Enter a safety stock effective date.

7. Enter the safety stock quantity.

   To have Oracle Inventory calculate safety stock based on an existing forecast for the item:

1. Navigate to the Safety Stock Update window or choose Reload from the Tools menu in the Enter Item Safety Stocks window.

2. The Parameters window opens automatically. In the Selection field determine whether to reload safety stock for all inventory items, a specific inventory item, or items in a specific category.

3. If you choose Specific inventory item in the Selection field, enter the item.

4. Select the method for loading the safety stock:

   Mean absolute deviation (MAD): Calculates demand using the mean-absolute deviation method. You must enter the service level percentage and forecast information.

   User-defined percentage: Calculates safety stock based on a user-defined percentage of a demand in specified forecast.

5. Enter the forecast to use in the safety stock calculation.

6. Optionally, enter the category set and category of items for safety stock specification.

7. If you chose User-defined percentage in the Method field, enter the safety stock percentage of demand.

8. If you chose Mean absolute deviation (MAD) in the Method field, enter the service level percentage. This is the desired level of customer service in satisfying the product demand immediately out of inventory. The higher this value is, the more safety stock quantity should be carried to provide protection against irregularities or uncertainties in the demand or the supply of an item.

   Enter a value between 50 and 100 as the service level. This represents the probability that you can fill an order from available inventory. A 90% service level means that on average you can fill an order immediately 90% of the time.

9. Enter the starting date on or after which the existing safety stock quantities are replaced by the results from the safety stock calculation.

10. When all parameter information is complete choose the Submit button to launch the process.