Inventory Management (P+L)
Inventories are essential elements within a logistics network. They are utilized to buffer against uncertainties. Uncertainties can occur on the demand site and on the supply site of the inventory. The objective is to achieve a high service level on the demand site while keeping inventory levels low. Inventory management requires that the demand wihtin the risk period can be forecasted. Therefore, methods that are applied in inventory management are similar to forecasting methods. In return, forecasting methods require a systematic collection of historical demand data. We support you with the selection of an appropriate inventory management policy and with the determination of its parameter. With this approach you can minimize the cost of capital given a specific service level. To support your inventory management you can apply the POM Inventory Optimizer which has been developed by us and which is utilized in practical situations.
Multi-level inventory management policies are required to optimize multiple inventory stages simultaneously. This issue occurs in supply chains or supply networks. Hereby, one major issue is the optimal allocation of the total safety stock within a supply chain to different stages.