Abstract
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.
| Original language | English |
|---|---|
| Pages (from-to) | 472-474 |
| Number of pages | 3 |
| Journal | IIE Transactions (Institute of Industrial Engineers) |
| Volume | 19 |
| Issue number | 4 |
| DOIs |
|
| Publication status | Published - 1 Jan 1987 |
Cite this
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The safety stock paradox. / Snyder, R. D.
In: IIE Transactions (Institute of Industrial Engineers), Vol. 19, No. 4, 01.01.1987, p. 472-474.Research output: Contribution to journal › Comment / Debate › Other › peer-review
TY - JOUR
T1 - The safety stock paradox
AU - Snyder, R. D.
PY - 1987/1/1
Y1 - 1987/1/1
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=0023535882&partnerID=8YFLogxK
U2 - 10.1080/07408178708975423
DO - 10.1080/07408178708975423
M3 - Comment / Debate
VL - 19
SP - 472
EP - 474
JO - IIE Transactions (Institute of Industrial Engineers)
JF - IIE Transactions (Institute of Industrial Engineers)
SN - 0740-817X
IS - 4
ER -