Archive | Replenishment

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Lead Time Analysis – Part 1

Replenishment decisions rely on forecasts of lead times amongst other things. If the mean lead time for an item is not expected to change much then the average of recent lead times for the item can be used. Unless that item is purchased frequently, there won’t be many lead times to use for averaging purposes. […]

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Inventory management simulation

An Educational Inventory Management Simulator

I have developed an inventory simulation spreadsheet for educational purposes. It provides two facilities which are not provided by the online simulator which is accessed by means of the “Simulator” tab. The additional facilities are graphs and use of your own demand history. The online facility is more versatile than the spreadsheet. Also, it carries […]

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Dice suggesting Monte Carlo simulation

Monte Carlo Simulator – Part 2

This article contains detailed information concerning the online Monte Carlo inventory management simulator which can be accessed by clicking on the “Simulator” tab in the menu at the top of the page. In parts of this article, it will be assumed that the reader has some knowledge of statistics. If you don’t have a statistical […]

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Purchase order

Reducing Ordering Delays

Introduction The lead time for an item starts when the item should be ordered, not when the order is sent to the supplier. To find out the effect on the required investment in inventory of that time difference, see the table in the article entitled “Reducing Lead Times”. If a periodic review replenishment system is […]

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Purchase order

What is Optimal Replenishment?

Introduction Claims that particular software packages provide optimal inventory management are commonplace. Such claims, by themselves, are meaningless. They only become meaningful if there is a full description of the theoretical assumptions involved and of the objective function (whatever is to be minimised or maximised).   Total Cost as the Objective Function Total cost is […]

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