SkuBrain 101

Matching inventory to demand

To start our inventory planning journey, imagine that we have the following demand forecast for a product:

# Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Total
Forecasted sales (units) 4 5 7 3 4 6 29

Also assume we have no stock on hand, we can get stock from the supplier immediately (i.e. our lead time = 0) and we can/will only ever place a single order for this product.

In this case, the amount of stock we need to buy is quite simply the sum of everything that we expect to sell – so 29 units.

Simple enough… now let’s introduce Stock on Hand.