Demand link is located between demand and internal process aspects and (Fig. 5) the categorization follows the results of the study made in the earlier phase of the case company’s inventory management improvement project (Niemi and Huiskonen, 2006). Two factors were seen as the most critical in the categorization: material price and demand variability (including variance in sales order quantities and frequency). It is normal in spare parts business that the prices of the parts vary significantly. This has natural impact on the operative stocking policies due to inventory value and excess stock risk and thus it was also taken into account while creating the categories.