Safety stocks — an example of theory and practice in O.R.

The problem treated in this paper concerns the determination of safety stocks as a function of the degree of service. Approximative formulae are found for all the cases with non-negative reorder level and with standard deviation of the demand in the lead time not larger than the expected value of that demand. A flow diagram for determining safety stocks is given. In conclusion some remarks are made on the difference between theory and practice in OR, especially with respect to the problemshift triggered by the analysis.