Expanding the square root law: an analysis of both safety and cycle stocks

This paper suggests alternative forms of the square root law which more accurately predict, when certain assumptions are met, the reduction in total inventory caused by a single consolidation of stock-keeping locations. It finds that, while cycle stocks can be decreased through centralization, the primary savings result from reductions in safety stock. (Reprinted by permission of the publisher.)
I. Introduction Evers and Beier (1993) have developed a model of the square root law associated with safety stocks that is significantly different from the traditional square root formulation. Their [...]