Supply Chain & Procurement worked example

Demand Variability with lowest period demand observed of 200 units: a worked example in supply chain & procurement

Push lowest period demand observed up to 200 units and the picture changes. This example computes every intermediate figure at that operating point. Use it to size safety stock and forecast risk in Supply Chain & Procurement.

The inputs for this scenario

  • Lowest period demand observed: 200 units (raised for this scenario; the documented default is 80)
  • Highest period demand observed: 140 units (unchanged)
  • Average period demand: 100 units (unchanged)

Working through the calculation

  • Applying the documented formula (Demand variability = (maximum − minimum) demand ÷ average demand × 100) to the inputs above produces each figure below.
  • At this operating point the engine returns 0 % for demand variability, the number this scenario is built around.
  • At this operating point the engine returns 0 value for spread.
  • At this operating point the engine returns 200 value for minimum.
  • At this operating point the engine returns 140 value for maximum.

How this compares with the baseline

  • Against the tool's baseline example, where lowest period demand observed sits at 80 units and the headline result is 60 %, this scenario comes in 100% below the baseline at 0 %.
  • It computes the peak-to-trough demand spread divided by average demand, expressed as a percentage. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Demand variability: 0 % (headline result)
  • Spread: 0 value
  • Minimum: 200 value
  • Maximum: 140 value

Run it with your numbers

  • Every input above is editable in the live Demand Variability calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.