Simulation based comparison of safety-stock calculation methods

Approaches for calculating an appropriate safety-stock level are supposed to ensure a designated service level with preferably low inventory. This paper analyses established mathematical methods for calculating safety-stock. Initially, these methods will be described and their specifics pointed out. With the aid of an extensive simulation study the performance of the methods is then mapped in regards to the resulting service and safety-stock level against the background of different articles with variant logistical behaviour. The simulation study results in a scientific overview of the field of application as well as the limits of the several methods.