Inventory Planning Model


Abstract: The complexity in managing the inventory in a real business is very prominent, which raises a need of model to logically calculate stock levels (such as safety stock,..). These stock levels were calculated by a dozen of formulas. To bring the formulas into the sun, I carefully connected one by one formula, which eventually results in the inventory planning model as illustrated:


This flow chart reveals a astonishing formula for qualifying the safety stock quantity in inventory management. This will help you calculate the sufficient stock levels that cover the risk shortage in inventory, but maintain the minimum inventory level.


With the map, I enabled you to have a popular but scientific inventory planning model