Patent Document ID: 8200521
Application ID: 11211842
Patent Status: 1

Claim One:
1. A computer-implemented method comprising: extracting, by a computer, historical demand characteristics of a demand for a product from a specified data source, the demand characteristics including the mean value of the demand for specified periods of time and/or the fraction of periods without any demand; evaluating, in a computer, the historical demand characteristics including the mean value of the demand for the specified periods and/or the fraction of periods without any demand; based on the evaluation, categorizing the demand as regular or sporadic; using the categorization to perform, using a computer, safety stock calculations for the product over the specified periods of time; employing a reorder cycle planning strategy with an alpha service level target wherein a probability of a shortfall in a planning period is given by (100-alpha)%; determining, using a computer, the safety stock for a planning period by performing the safety stock calculations using a set of formulae; and wherein for reorder cycle planning with an alpha service level with regular demand the set of formulae is given as: SStck = F N ⁡ ( 0 , 1 ) - 1 ⁡ ( α 100 ) ⁢ σ D + L ⁢ L + T R , and wherein for reorder cycle planning with an alpha service level with sporadic demand the set of formulae are given as: p = ( D ⁡ ( L + T R ) ) 2 ( σ D + L ⁢ L + T R ) 2 , ⁢ λ = D ⁡ ( L + T R ) ( σ D + L ⁢ L + T R ) 2 , ⁢ S = F Γ ⁡ ( p , λ ) - 1 ⁡ ( α 100 ) , SStck=S−D(L+T R ), wherein: α alpha service level [in %], D demand forecast for the current period, L replenishment lead time for the current period [in periods], σ D+L forecast error for the current period, T R reorder cycle [in periods], F Γ Gamma distribution, and F N Gaussian distribution.