In the above, the subscripts designate which process a variable is associated
with, either demand, D, or supply, S. In the course of normal production and
forecasting, the average demand and production can often be closely coupled.
The fundamental reason for safety stock is the unpredictable fluctuations in
demand represented by the variance. For our analysis, we will assume the
average rates of demand and production are closely coupled so that they are
both equal to .