Guessing your safety stock is one of the most expensive habits in inventory management. Too high and you tie up working capital. Too low and you face stockouts. The Safety Stock & ROP Simulator in ForgeStock replaces guesswork with statistics.

Before you start

The simulator depends on demand statistics generated by the ABC/XYZ Classification job. If you have not run that job yet, do that first. The simulator will show zero recommendations for all items until classification data exists.

What the simulator calculates

For each classified item, ForgeStock calculates:

• Safety stock — the buffer inventory needed to cover demand variability during lead time, based on your target service level

• Reorder point (ROP) — the stock level at which you should place a replenishment order, calculated as average demand during lead time plus safety stock

The formula uses real demand variability from your sales history, not a fixed number of days coverage.

Step 1: Navigate to the simulator

In D365FO, go to: Inventory management → Inquiries and reports → Inventory Optimizer → Safety Stock & ROP Simulator

Step 2: Set the parameters

• Site — select the site to simulate

• Service level % — typically 95% for A items, 90% for B items, 85% for C items. A higher service level means more safety stock.

• Lead time source — ForgeStock checks in this order: item coverage authorization fence → Lead Time Advisor historical average → planned lead time from item defaults → system default of 14 days. Run the Lead Time Advisor first for the most accurate results.

• Lead time days override — optional. Enter a fixed number to override all lead time sources for this run.

Step 3: Run the simulation

Click Run simulation. The job processes all classified items for the selected site and populates the results grid.

Step 4: Review the results

The results grid shows for each item:

• Current safety stock — what is set in item coverage today

• Recommended safety stock — what ForgeStock calculates based on your service level

• Current ROP — existing reorder point

• Recommended ROP — statistically derived reorder point

• Gap — difference between current and recommended, so you can prioritise which items need the most urgent update

Sort by Gap descending to find items most at risk first.

Step 5: Apply the recommendations

Select the items you want to update, then click Apply to item coverage. ForgeStock writes the recommended safety stock to the Minimum on-hand field and the recommended ROP to the item coverage record in D365FO — no manual data entry required.

Tip: Pair with the Lot Size Simulator

Safety stock and ROP tell you when to order. The Lot Size (EOQ) Simulator tells you how much to order. Together they define a complete replenishment policy:

• When on-hand stock falls to the ROP → place an order

• Order exactly EOQ units each time

Run both simulators and apply both sets of recommendations to get the full benefit.

How often should you re-run it?

Re-run the simulator whenever:

• You re-run the ABC/XYZ Classification job (monthly recommended)

• A supplier changes their lead time significantly

• You adjust your target service level for a product category

• You onboard a new major customer that changes demand patterns