ABSTRACT:
Inventory proportionality is the objective of demand-driven inventory management. The essential optimal outcome is to have a similar number of days worth of inventory on hand across all items so that the time of running out of all products would be simultaneous. The secondary objective of inventory proportionality is inventory minimization. By integrating exact demand forecasting with inventory management, replenishment inventories can be scheduled to arrive without a moment to spare to renew the item bound to run out first, while in the same time balancing the inventory supply of all items to make their inventories more corresponding, and in this way closer to achieving primary goal. Accurate demand forecasting also allows the desired inventory proportions to be dynamic by deciding expected deals out into the future; this takes into consideration inventory to the be in the extent to expected here and short-term sales or utilization as rather than to past averages, a much more accurate and optimal outcome. Integrating demand forecasting into inventory management thusly additionally takes into account the forecast of the “can fit” point that inventory storage is restricted on a for every product basis.
