Customer Demand and Inventory Updated

Customer Demand and Inventory
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How can firms cope with huge variability in customer demand?
Some of the ways in which the firms are able to cope with the customers’ demand variability include;
Keeping safety stock: this is the inventory amount that should be kept in the warehouse by the distributors in order to protect the firm against the deviations that may occur from the average demand especially during the lead time.
Fixing the techniques that are able to complete the communication distributions for the merchants as well as the purchasers, thereby enhancing collaborative demand forecasting.
Try as much as possible to postpone the merchandise diversity that occurs in the supply chain (Simichi-Levi, Kaminsky & Simichi-Levi, 2008). This can be done by gathering of requests and information from individuals in the upstream of the supply chain.
What is the relationship between service and inventory levels?
Service level is an extension of the number of employees that the firm has at hand to interact with the buyers as well as make the sales of the products when they brought in the store. Inventory level, on the other hand, measures the supply amount (Reader, 2014). Therefore, all these are the measure of customers’ demand that should match the supply in the firm.
What is the impact of lead time, and lead time variability, on inventory levels?
The lead time and the lead time variability can cause shortage or excess inventory. In some cases, the supply leads to the holding of inventory with the target of the future demand as well as the unseen uncertainty (Bagchi, Hayya & Chu, 1986).

This results in too little/much inventory.
References
Bagchi, U., Hayya, J., & Chu, C. (1986). The effect of lead-time variability: The case of independent demand. Journal Of Operations Management, 6(2), 159-177. doi: 10.1016/0272-6963(86)90023-9
Reader, C. (2014). What is the Relationship Between Service and Inventory Levels?. Retrieved from https://smallbusiness.chron.com/relationship-between-service-inventory-levels-22720.html
Simichi-Levi, D., Kaminsky, P., & Simichi-Levi, E. (2008). Designing and Managing the Supply Chain (3rd ed.). New York: McGraw-Hill Higher Education.