Half the time you will use some or all of the safety stock before the replenishment shipment arrives. On average, the full safety stock quantity is always on the shelf when the replenishment shipment arrives. A distributor puts inventory in her warehouse to sell it to customers. Profits from these sales are necessary to pay the distributor's expenses and provide a return on her investment. With this thought in mind, it seems as though it would not be a good idea for a distributor to intentionally have non-moving inventory in stock.
Safety stock is, in reality, an expense of doing business.
But it is necessary to ensure good customer service. To maximize profits, we must carefully control all expenses, including safety stock. Therefore, we want to achieve our customer service goals with the least possible amount of safety stock. Forecast demand is a prediction of how much of a product will be sold or otherwise used in a particular month, and usage is the quantity that was actually sold or used. The thirteen pieces per day is multiplied by the projected lead time of eight days resulting in a lead time demand of 104 pieces.