The safety stock paradox

When determining reorder levels for inventory systems, results involving negative safety stocks are often obtained. Such results, although they can be rationalized, are counterintuitive in the sense that safety stocks are meant to be additional stocks held as a buffer against the effects of uncertain conditions and should therefore always be nonnegative. This paradox is examined in the paper and resolved by demonstrating that the accepted definition of safety stock understates the actual increase in stock to meet uncertain conditions.