Reviewing Cycles Of Inventory Management
Twenty forecast algorithms plus seasonal and product life cycle curves. Twenty-one filters are employed to identify anomolies and outliers; the forecaster manually revises the inventory management services used; Reviews are typically on a monthly cycle. Takes lot size, including minimum order quantity, into consideration when determining the order plan. The replenishment quantity is independent of obsolescence, which is determined by the forecast used. Lead time can be adjusted.
Forecasting module allows calculation of safety stock based on forecast error and lead time. Each item is treated uniquely, using a combination of adaptive exponential smoothing and probability forecasting. The method is chosen by the system; users interact only when directional changes are needed. A review cycle is user-defined and based on item characteristics. All replenishment components are updated daily and replenishment decision is made daily for each vendor/item/location combination. Lead-time receipt history is used to forecast an item's lead time and lead-time variability. Considers an item's demand forecast, lead-time forecast, demand variability, service levels, and item's order cycle. Carrying costs are categorized as either Physical (taxes, depreciation, insurance and obsolescence) or Alternate Return on Investment costs (the return the company realizes from its inventory). Bayesian statistics are used to provide a forecast based on a combination of statistical models to optimize forecasting level, models, and casual factors selection. Stock/inventory calculation takes into account recycle time, lot minimum, lot increment, demand horizon, safety stock, and lead times. A DRP mechanism is used to calculate reorder point. Done for item, location and channel. Variability in lead times can be introduced in calculation of safety stock and buffering for SKUL inventory. Considers forecast, forecast error, lead times and lead-time uncertainty, and service level. Visible but not included in calculations. Thirty-two forecast algorithms are provided. The system may suggest a revised method after one user-defined review cycle passes. Optimal Replenishment Quantity calculation takes into account purchasing / manufacturing lot-sizing constraints and product obsolescence, and optimizes the total annual cost using 28 cost factors. Considers lead time, yield and unit count error calculates a service stock and order quantity that accounts for this error. Considers demand patterns, forecast error, order quantity, and supply variability for each item/ location. Utilizes 28 different inventory costs. Six forecast methods are provided. Simulation functions allow changes to any of the forecast methods to assess long-term effects for optimal forecast methods. User defined review cycle. Utilizes the following factors: bracket costs, dying item, alternate lead times and adjustment to trends. Lead-time variability is considered in the calculation of safety stock with consideration to sales rates and desired service levels. The statistical measure of forecast error and the user specified service levels are used to calculate safety stock. Factors in cost of capitol, storage costs, taxes, insurance, depreciation or obsolescence, pallet handling costs, purchase order handling costs, and offsite storage costs. Twelve forecast methods are provided, configurable by thousands of variants. Multiple methods are run simultaneously to compare historical performance, and the controlling forecast is monitored for consistent bias. Sensitivity and frequency of review cycles for both perspectives are user-defined. |