Inventory Optimisation

What is Inventory Optimisation?

Inventory optimisation is the practice of balancing the level of inventory in the storage unit to meet the target service without tying up large amount of capital in inventory. To successfully achieve this balance, companies account for the volatility in both supply and demand.

Overall, inventory optimisation helps to maintain:

  • minimum cost of average on-hand inventory
  • highest desired fill rates for the items being optimised
  • predictive control over inventory performance

In practice, it reduces stock levels so that there is enough room for flexible sales activities. Inventory optimisation, generally, avoids loss of sales and increases the ability to deliver – and all this with optimal capital utilisation.