Most companies rely on either the best guess method or one of the more traditional methods of calculating the level of safety stock required to cover fluctuations in demand.
Demand Solutions™ Service Level Optimizer uses a radical yet common sense approach to determine safety stock. Simplistically the Optimizer focuses on total demand and when calculating forecast deviation ignores those months where the forecast was higher than demand as no extra stock would have been required to fulfill demand for that period. The result is lower overall inventory levels to achieve the desired customer service target and hence a reduction in working capital.
To learn more about the Service Level Optimizer please contact the DMS support desk on 02 9659 4559.