Smooths out short-term fluctuations by averaging a specific number of past periods.
Models like (single period) or EOQ (economic order quantity) help optimize.
Understanding qualitative and quantitative methods (like moving averages and exponential smoothing) to predict future customer needs.
Inventory planning requires balancing holding costs against ordering costs. The course heavily features the model.
: Many learners use pre-formatted Excel templates to calculate metrics like MAPE and Moving Averages, as seen on YouTube tutorials Academic Repositories
The most difficult part of the final exam is usually the inventory and cost formulas [13†L6-L18]. Memorize the following frameworks:
The extra inventory held to mitigate the risk of stockouts caused by fluctuations in supply and demand.
Maintaining a steady production rate. This keeps labor costs stable but builds up high inventory levels during low-demand periods.
This translates supply plans into actionable production schedules. Key techniques:
Safety Stock=z×σd×LSafety Stock equals z cross sigma sub d cross the square root of cap L end-root = Average daily demand = Lead time in days