Article1995

EXPANDING THE SQUARE ROOT LAW: AN ANALYSIS OF BOTH SAFETY AND CYCLE STOCKS

33 citations0/0 files storedLogistics and transportation review

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Supply Chain and Inventory Management Advanced Manufacturing and Logistics Optimization Logistics and Transportation Systems

Abstract

This paper suggests alternative forms of the square root law which more accurately predict, when certain assumptions are met, the reduction in total inventory caused by a single consolidation of stock-keeping locations. It finds that, while cycle stocks can be decreased through centralization, the primary savings result from reductions in safety stock.

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2011Top-Down Versus Bottom-Up Demand Forecasts: The Value of Shared Point-of-Sale Data in the Retail Supply Chain 2008Consolidation effects and inventory portfolios 2011Integrated safety stock optimization for multiple sourced stockpoints facing variable demand and lead time 2012The Impact of Contract Manufacturing on Inventory Performance: An Examination of U.S. Manufacturing Industries 2016The impact of the number of parallel warehouses on total inventory

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