Inventory management is a very simple concept – don’t have too much stock and don’t have too little. Since there can be substantial costs involved in straying above and below the optimal range, careful inventory management can make a huge difference in the profitability of a business. Although the concept is simple, the process of getting the right balance can be quite a complex and time consuming task without the right technology.
There are two fundamental questions that must be answered, in order to manage the inventory of any physical item – when to order and how much to order. I have developed a reorder date algorithm that answers these questions clearly and concisely, using the preferred service level approach.
In this blog, I will be writing about this Excel-based reorder date algorithm, with detailed descriptions of the data presented. Along the way, we will also be following a representative customer example of an active inventory SKU.
I welcome any comments and if you are interested to see how this algorithm could work for you, please drop me a line. I will send you details of the information needed to return a screen print showing the current situation of your inventory item.
I hope this blog will be informative and interesting. Let me know!
Regards,
Peter Phillips
Vancouver, Canada.
March 13, 2008 at 11:29 am |
[...] blog, start from the beginning for a better understanding of how this reorder date algorithm works. Click here for my first post and then just navigate [...]