Inventory Optimization using Demand Metrics

Inventory Optimization Workshop:  Optimize your inventory planning using demand metrics!

- Contact us for pricing and schedule!
- Duration 3 hours
- Online Web Workshop

The objective of this workshop is to review the close link between forecast accuracy and inventory optimization and discuss the implications of forecast error for inventory strategies – Lead time uncertainty, safety stock, and planning to forecast.  The workshop will also look at the mechanics behind the various demand metrics. 

You will learn

The mechanics of various demand metrics used in a manufacturing organization

The pros and cons of the demand metrics and how forecast bias can be controlled

The limitations and dangers of using Weeks Forward Coverage as an Inventory Policy Parameter

How carefully designed demand metrics can be leveraged in inventory management and planning

Detailed Outline of the Workshop:

Accurate and timely demand plans are a vital component of an effective supply chain.  Forecast accuracy at the SKU and DC level is critical for proper allocation of resources, both working capital as well as strategic assets. 

Inaccurate demand forecasts often can result in supply imbalances which could ultimately cause inferior customer service and bloated inventories.  In this session, we will discuss the process of evaluating demand plans, the pros and cons of different demand accuracy metrics, and the time-lag with which accuracy should be measured.  We will also consider metrics that identify and track forecast bias.

With the above background, we will discuss how demand metrics can be leveraged in designing scientific inventory planning parameters.  Typically, Organizations set safety stock in a set number of weeks or months to cover unexpected demand.  Such methods of safety stock calculation as measure of weeks-forward coverage, also called WFC, can often be unscientific and extremely dependent on the judgment of the planner.  Conceived in the slide-rule era, the WFC magnifies the effect of an inaccurate forecast.  

Please contact us for a customized on-site or web workshop.