by Jon Schreibfeder | Feb 15, 2016 | Forecasting, Stocking Decisions
Last month we began our discussion of safety stock. Safety stock is “insurance” inventory you maintain for a product to prevent stockouts due to unexpected demand or delays in receiving a replenishment shipment. Most systems calculate safety stock quantities based on...
by Jon Schreibfeder | Jan 15, 2016 | Replenishment Parameters
In the current series of articles we are working through how to optimally set parameters in your replenishment software. There are four critical factors that determine how successful you are in having the right quantity of the right item at the right location at the...
by Jon Schreibfeder | Dec 15, 2015 | Forecasting, Replenishment Parameters
In the current series of articles, we are looking at how to best set parameters in your replenishment software. There are four critical factors that determine how successful you are in having the right quantity of the right item at the right location at the right...
by Jon Schreibfeder | Oct 15, 2015 | Forecasting, General
Many computer software packages today rave about their advanced forecasting and replenishment capabilities. If these systems are so good, why do so many buyers still make all of their replenishment decisions by “S.W.G.” (Scientific Wild Guessing)? We have identified...
by Jon Schreibfeder | Sep 15, 2015 | Forecasting
Many software packages include a notification when the on-hand quantity of a stock product is equal to zero, also called a stock-out report. You have no inventory left on the shelf. This type of notification is worthless in your quest to achieve effective inventory...
by Jon Schreibfeder | Aug 15, 2015 | Forecasting
There are many systems that forecast future demand of products. Most of these systems utilize a “time series forecast model”. That is, they utilize some average of past sales or usage. For non-seasonal products, they will calculate an average of what you sold over...
by Jon Schreibfeder | Jul 15, 2015 | Replenishment Parameters
A lot of software packages advise buyers to purchase enough stock so that the product demand is met during the “replenishment horizon”. The replenishment horizon is equal to the sum of: • Demand during anticipated lead time • Demand during the upcoming order cycle •...
by Jon Schreibfeder | Jun 15, 2015 | Order Cycles
The order cycle (also commonly known as a review cycle) is the length of time (usually expressed in days) between the issuance of target replenishment orders to the primary supplier of a product. The target order represents your vendor’s purchase requirement...
by Jon Schreibfeder | May 15, 2015 | Order Cycles
In order to avoid stock outs, you must reorder products when you still have enough stock remaining in inventory to satisfy customer demand during the anticipated lead time. You also might want to keep some safety stock just in case you sell more than you forecast or...
by Jon Schreibfeder | Apr 15, 2015 | Forecasting, Replenishment Parameters
Over the last several months, we have been discussing barriers to achieving lean inventory management. That is, having inventory arriving “just in time” when it is needed by a customer or for use in an assembly or repair. Successful lean distribution is dependent on...
