Strategic Multi- echelon Inventory Optimization considers the following intuition:

• Maintain stock cost efficiently except when service requirements don't allow for this. This tends to push buffer stocks to locations just before major value is added - for example, before an expensive and low-yield distillation process.
• Pool inventory - This helps minimize risk across products, components, and customers. For example, variability of demand for a raw material is usually less severe than the variability of demand for the 25 end products and packaging options that the material feeds.
• Coordinate inventory policy across different items - When inventory is available at the same time, this helps reduce early stock.