Abstract: An inventory of service parts may be managed by assessing a company's capability, optimizing the inventory and implementing a management program based on the assessment and optimization. Optimizing target stock levels for the inventory of parts may be accomplished by calculating an inventory baseline for understanding information about the currently held inventory; developing a service strategy for a set of segments; quantifying a service level for each of the segments; analyzing the segments and their service levels for identifying at least one logistically distinct business; assigning each of the segments to a “best-fit” planning model for indicating each segment's deployment, replenishment, forecasting and review characteristics; identifying a probability distribution function for estimating a demand process of each of the segments; and calculating a target stock level for each segment.