Has anyone used Inventory Optimization concurrently with regular optimizer?

[Former Member]

Has anyone used Inventory Optimization concurrently with regular optimizer? Is there a need? The Optimizer in the Supply and Response module seems to be sufficient for inventory optimization...

Please advise!

[Former Member · Accepted solution]

Hi Amber,

What did you mean by Optimization in Supply and Response is sufficient?

Inventory Optimization is different concept then Supply Network Optimization (Supply & Response). Inventory Optimization, in the nutshell is to arrive at safety stock required to meet your demand with target service level. In general terms, output (Safety stock, TIP) of Inventory optimization becomes demand element for supply optimization (Supply planning).

Now to answer your whether both are needed? it depends on the business needs (maturity of Supply Chain). Many companies still use primitive methods to determine safety stocks levels not knowing the actual impact. Some leverage mathematical models (IBP Inventory, SAP EIO, SmartOps or other tools) to determine safety stock considering demand and supply variability.

Hope this helps.

Regards,

Harshil Desai