Can probabilistic forecasting reduce inventory?

Yes. By sizing buffers according to real risk, not assumptions. Traditional safety stock rules tend to apply blanket coverage or rely on static parameters that age quickly under volatility, which often results in too much stock on stable SKUs and too little on variable ones. Probabilistic forecasting reverses that pattern by quantifying demand uncertainty per SKU period, so the buffer concentrates where it actually protects service and shrinks where it only ties up working capital. The net effect is lower total inventory at equal or better service level, with the additional benefit that the logic adapts continuously as demand profiles change.