This paper addresses the problem of how much total stock is required at a stocking location, with reference to a small number of overall characteristics. A relationship defining stock cover to throughput, number of items, overall service level, lead time and re-order interval is derived. Its use is seen as a strategic tool, to investigate the costs and benefits of changing service levels or amalgamating stocking points etc. The restrictions on its applicability are given.
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Johnston et al. (1988) studied this question.
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