What Is The Role Of Safety Stock In An MRP System?

Safety stock defines the minimum level of inventory that the MRP system will seek to maintain. In the absence of other requirements (or after other requirements are fulfilled), if inventory falls below the safety stock level, the MRP system should generate orders sufficient to maintain safety stock at the specified level.

In practice the level of safety stock should be set to accommodate
- unplanned orders (as from Development Engineering) or other deviations from the master schedule
- delays in receiving materiel from suppliers
- mismatch between physical inventory and computer records.

The role of safety stock in MRP system is very significant. Safety stock buffers uncertainties in the quantities. These uncertainties are caused because of quality. For offsetting any uncertainties in timing, safety lead time is used. Increase in safety stock, means more inventory is being carried. This reduces the overall performance of Material Requirements Planning or MRP. The best thing which the company can do to decrease the safety stock is to eliminate the uncertainties in the quantities.

Safety stock is always good for the urgent requirement of the designing material...So it is very important...