Empirical evaluation of safety stock policies

Existing research on inventory management has emphasized the gap that exists between the theory and practice in safety stock determination. The objective of this paper is to bridge this gap by investigating the current organizational practices in safety stock management and its trend toward the future. A survey questionnaire was sent to 250 randomly selected manufacturing firms in Pennsylvania, New Jersey, and Delaware. The results of the survey indicate that production managers are content with satisfactory solutions to their inventory control and safety stock determination problems. The paper emphasizes the negative effect of such solutions and argues for the need for optimal policies.