There is another way to calculate a Red Zone in R+ called the Statistical Red Zone method. This method uses a calculation that is based on standard deviation of demand and a probability factor that determines the accuracy of the safety protection to generate the red zone size.
This method can be used in conjunction with adding additional days of coverage to Red and Yellow Zones to establish another method of buffering.
Prerequisites for Statistical Method
Only available for use with Planning Calendars
Knowledge of manual Buffer Creation
Knowledge of uploading buffer profiles via mass upload
Statistical Red Zone Calculation
The calculation for the statistical RZ is: (z factor for probability%) x SD of DD x SQRT(LT + OI)
Z factor = the NORM.S.INV excel function for the assigned probability%
Probability% = The value can be a number between 0 and 1 (0.95= 95%)
SD = standard deviation of historical demand over the defined horizon