Relationship Between Forecast Accuracy and Safety Stocks
Arkieva
AUGUST 31, 2021
A company’s total inventory is built up of many different parts such as strategic stock, anticipation stock, safety stock, cycle stock, unplanned stock. The cycle stock is the one most connected to the demand forecast; it is expected to be sold as the forecast becomes real demand. Safety stock on the other hand is extra stock to deal with the variability of the demand or supply.
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