“Don’t stock too much and don’t run out!”  This directive is issued by many CEOs – a crisp and clear message that seems impossible to accomplish.  How much is enough?  What will demand be for each of our thousands of products?  How wrong will our forecast be, and how important is it that we don’t run out?  How do we formulate the plan and make it so? This is largely the point of your Inventory Planning process but how well is it working for you?

Probability forecasting and scenario analysis are quickly becoming the approaches of choice for optimizing inventory levels.  By leveraging these predictive modeling techniques you can discover and understand trade-offs between service levels and inventory investments.  This will help you develop a consensus inventory plan that is continuously updated to reflect real-time changes in demand, supply, and business priorities.