Inventory levels rise and fall as supply and demand ebb and flow. Inventory is at it's peak just as the next batch, kanban, or order arrives and then decreases as materials are consumed. This rise and fall is known as cycle stock, the stock that exists during the replenishment interval. In addition to cycle stock there may also be some amount of safety stock. While at any time the on hand quantity will cycle from minimum to maximum when you aggregate may items all with their own replenishment intervals and new stock arrival dates you can make a reasonable estimate of the expected or planned level of inventory by taking half of the cycle stock plus safety stock. Expected Inventory = 1/2*(demand * replenishment interval) + safety stock
Expected Inventory
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