Chapter 2 – Fiscal Management

22030.10.2 Safety Levels

• Normally, safety levels are established to minimize stock outages. To determine the level of safety stock that should be maintained, the critical need of the item shall be established based upon the following:

  • The degree of the problem if there is no stock on hand.

  • The effort, both in cost and time, necessary to secure the stock.

• Stock Outages Classified

  • Stock outages shall be classified as follows:

    • Minor – stock outage of these items shall cause little inconvenience and shall be overcome with a little extra effort, perhaps a phone call and with a short delay in processing the demand or with a back order. Work production delays are not a factor. These items are considered regular stock items and 15 days safety stock shall be sufficient.

    • Major – a stock outage of these items shall cause some inconvenience and could result in additional costs because of production delays or program disruption. Generally, these items are also considered regular stock items but an increased safety stock of 16 to 25 days is required. These are the “A” items (see source code in DOMDepartment Operations Manual 22030.8.6.2 for a description of “A” items) or items with the highest demand.

    • Critical – a stock outage of these items shall cause significant delays in production or intolerable program disruption and could result in excessive costs. These items are not available locally and a stock outage may endanger public health or safety. These items are considered contingency stock. A safety level of predetermined amount shall be set.