SYSTEM AND METHOD FOR DETERMINING DEMAND DISTRIBUTION FOR SAFETY STOCK PLANNING

A system and method are described for identifying an appropriate demand distribution to use for safety stock planning within a supply chain management (“SCM”) system. For example, one embodiment of the invention comprises a computer-implemented method comprising: extracting historical demand characteristics 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 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 characteristics into one of two or more different predefined categories; and using the classification to perform safety stock calculations for the product over the specified periods of time.