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Inventory Management, Forecasting, and Demand Planning

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Inventory Management, Forecasting, and Demand Planning


  • Interactive training techniques, hands-on exercises, and summarized presentations.
  • Individual and group exercises related to the work.

Course Objectives:

Participants will be able to:

  • Identify inventory management goals and their impact on cost and customer service.
  • Set up appropriate inventory classification and use best practices for material specifications and indexing.
  • Use forecasting techniques to predict demand and improve supply lead time management.
  • Calculate optimal order quantities and determine inventory and reorder point.
  • Schedule periodic counting and improve inventory record accuracy, finding ways to reduce inventory.
  • Identify different techniques for inventory reduction, including Just-in-Time (JIT) production.
  • Define relevant Key Performance Indicators (KPIs) to measure and improve inventory performance.

Target Audience:

  • Inventory managers and planners at executive and supervisory levels.
  • Anyone working in material management roles such as purchasing, warehousing, distribution, who needs to understand inventory planning and control mechanisms.

Program Content:

  • Introduction to Inventory Management.
  • Objectives of inventory planning and control.
  • Reasons for holding inventory.
  • Inventory information system considerations.
  • Push vs. pull system.
  • Determining inventory costs.
  • Customer service in inventory management.

Inventory Description and Classification:

  • Types of inventory.
  • Inventory classification using ABC method and classification model.
  • Uses of ABC classification.
  • Material specifications and indexing.
  • Demand forecasting and lead time management.
  • Inventory order cycle.
  • Independent demand vs. dependent demand.
  • Factors influencing demand.
  • Factors affecting demand forecast accuracy.
  • Demand patterns.
  • Methods for predicting demand quantities:
    • Seasonal demand.
    • Moving average.
    • Exponential smoothing.
    • Measurement of forecast accuracy.
  • Determining lead time and control methods.

Inventory Systems:

  • Inventory holding costs and ordering costs.
  • Economic Order Quantity (EOQ) model.
  • Dealing with quantity discounts.
  • Objectives of sound inventory.
  • Determining appropriate inventory.
  • Determining the reorder point (ROP).

Inventory Counting and Control:

  • Importance of accurate inventory records.
  • Storage functions.
  • Reasons for inventory record inaccuracy.
  • Requirements for accurate inventory records.
  • Reporting inventory accuracy.
  • Periodic and perpetual counting.

Reducing Inventory Investment:

  • Importance of Just-in-Time (JIT) theory or pull system in reducing total costs.
  • Identifying surplus.
  • Options for disposing of excess inventory.
  • JIT methods.
  • JIT requirements.
  • Risks of JIT.

Measuring Inventory Management Performance:

  • Importance of tracking the effectiveness of inventory planning and control functions.
  • Underlying reasons for poor performance in inventory management.
  • Setting key performance indicators and inventory objectives.
  • Examples of key performance indicators used in inventory planning and control functions.

Characteristics of an Inventory Specialist.

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