Summary
Demand for service and other parts is often low volume or intermittent. Commonly accepted safety stocking methods usually assume that departures from planned (forecasted) demand are approximately normally distributed. The standard safety stock formula is effective in providing the target service level when forecast errors are approximately normally distributed. Some fairly large departures from normality can often be tolerated without much deviation from the target service level. However, when demand is extremely low volume or intermittent, the standard safety stock formula may perform poorly. This is especially true with short lead times. The standard safety stock formula for buffering demand variation has been effectively used for many years.