Implementation of inventory analysis tool for optimization and policy selection

Abstract

This paper serves to describe the development and application of a web based, low cost, user friendly Inventory Analysis Tool for stock availability optimization and enhanced delivery performance. The inventory optimization attempts to find dynamically the best inventory policy and safety stock for Stock Keeping Units with independent demands. The analysis is based on supply and demand data, which includes forecast variability and measurements. Important supply chain parameters are modeled and estimated with graphical visualization to identify potential opportunities for improvement. The tool gathers all historical and up-to-date information to effectively track the replenishment level, safety stock level and re-order level of finished goods within minutes. A case study from National Heart Center Singapore on the use of the tool is presented. The results should encourage more inventory managers to use the tool to lower inventory dollar level and put forecasting error in check and control.