The Smart Forecaster

Pursuing best practices in demand planning, forecasting and inventory optimization

Assessing How Suppliers Influence Your Inventory Costs

Assessing How Suppliers Influence Your Inventory Costs

Software for inventory optimization is most often used to crank out the analytical results you need to run your day-to-day business, such as Reorder Points (also known as Mins) and Order Quantities. This specialized software helps you find the sweet spot that balances inventory costs against item availability during routine operations.

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Getting “Halfway There” with Demand Planning

Getting “Halfway There” with Demand Planning

Demand planning takes time and effort. It’s worth the effort to the extent that it actually helps you make what you need when you need it. But the job can be done well or poorly. We see many manufacturers who stop at the first level when they could easily go to the second level. And with a little more effort, they could go all the way to the third level, utilizing probabilistic modeling to convert demand planning results into an inventory optimization process.

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The Advantages of Probability Forecasting

The Advantages of Probability Forecasting

Most demand forecasts are partial or incomplete: They provide only one single number: the most likely value of future demand. This is called a point forecast. Usually, the point forecast estimates the average value of future demand. Much more useful is a forecast of full probability distribution of demand at any future time. This is more commonly referred to as probability forecasting and is much more useful.

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Beware of Simple Rules of Thumb for Managing Inventory

Beware of Simple Rules of Thumb for Managing Inventory

Managing inventory requires executives to balance competing goals: high product availability versus low investment in inventory. Executives strike this balance by stating availability targets and budget constraints. Then supply chain professionals translate these “commander’s intentions” into detailed specifications about reorder points and order quantities.

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Recent Posts

  • Assessing How Suppliers Influence Your Inventory Costs
    Software for inventory optimization is most often used to crank out the analytical results you need to run your day-to-day business, such as Reorder Points (also known as Mins) and Order Quantities. This specialized software helps you find the sweet spot that balances inventory costs against item availability during routine operations.
  • Getting "Halfway There" with Demand PlanningGetting “Halfway There” with Demand Planning
    Demand planning takes time and effort. It’s worth the effort to the extent that it actually helps you make what you need when you need it. But the job can be done well or poorly. We see many manufacturers who stop at the first level when they could easily go to the second level. And with a little more effort, they could go all the way to the third level, utilizing probabilistic modeling to convert demand planning results into an inventory optimization process.