What is demand classification?
Many classic techniques to determine safety stock levels assume a normal distribution of demand. This makes for some very simple and easy math, but the truth is that most of demand is not normal. Most demand has high levels of variability and is not consistent from period to period. This can lead to either too much inventory or stock-outs and lost sales.
LLamasoft’s Demand Classification Software
Through a simple and intuitive user interface, Supply Chain Guru thoroughly analyzes and automatically classifies the underlying demand patterns into one of 10 demand classification categories. Once the demand patterns are analyzed and classified, Supply Chain Guru applies the appropriate probability distributions that best represents your lead time demand to determine accurate safety stock targets, reorder points and quantities that will be required to meet the company service goals.