Notation AVG average daily demand STD standard deviation of daily demand LT replenishment lead time in days h holding cost of one unit for one day ■K=fixed cost SL service level (for example,95%).This implies that the probability of stocking out is 100%-SL(for example,5%) Also,the Inventory Position at any time is the actual inventory plus items already ordered,but not yet delivered,minus items backordered.Notation „ AVG = average daily demand „ STD = standard deviation of daily demand „ LT = replenishment lead time in days „ h = holding cost of one unit for one day „ K = fixed cost „ SL = service level (for example, 95%). This implies that the probability of stocking out is 100%-SL (for example, 5%) „ Also, the Inventory Position at any time is the actual inventory plus items already ordered, but not yet delivered, minus items backordered