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KNOWLEDGE LIBRARY

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27Jun

Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

Forecast Bias Profiling

The Forecast Bias Profile reveals SKU by SKU the deviation of the forecast from perfect. An ideal forecast bias profile has the large majority of the SKUs close to the Perfect Forecasting Line (0% error line) and about half the SKUs above the line and half below the line. The Forecast Bias Profile for a large consumer products company revealed a significant number of SKUs with forecast errors well beyond normal control limits and a majority of the SKUs with overestimated demand. When asked about the results, the client shared that during the previous year the inventory control group had indiscriminately cut safety stocks for all SKUs and that the sales group was nervous about service levels potentially declining. To compensate, the sales group began indiscriminately inflating forecasts.

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