Deciding how much inventory to keep and at which location in your network, is a tricky thing to work out. It is important to have a good understanding of your demand (what do the customers want and what can we learn from the past) and of your supply performance (how long does it take to deliver the products and what are the risks en route from the source of the product to the customer). You need to determine at what service level you want to operate at each location and how much you are able to invest in stock holding to support this service level.

In this process, IPREM Consulting can support with the following:

  • Deliver training on the principles of inventory planning;
  • Analyse historic demand data and determine the reliability of demand data;
  • Define the demand parameters required as input to the inventory calculations;
  • Map the supply chain network and determine the preferred stock locations;
  • Determine the supply lead time and supply lead time risks;
  • Define the supply parameters required as input to the inventory calculations;
  • Explain the pros and cons of the difference levels of service (90-99.9%);
  • Calculate the stock holding investment required to support the chosen service level;
  • Calculate the stock parameters per SKU of group of SKU’s per stock location (safety stock, average stock, maximum and minimum stock).

See also: ⇒ Consultancy: Replenishment Models

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