Supply Chain Free Consulting
Tons of academic literature on ‘Inventory models’ in Production x Distribution systems. But the best-case awareness is on how to look up a z value and area under the curve assuming demand is normally distributed. Thats what they teach in B schools. if someone bothers to know the ‘math’.
E.g.
Half question
What is the probability of stock out at current inventory level?
Full question
What is the probability that demand over next n days will exceed the reorder point (however computed). or exceed projected available balance? or exceed the target stock level? or exceed the safety stock? or exceed some arbitrary number?
It depends.
First demand is not necessarily normally distributed esp. if the demand is trended or sporadic.
Secondly there aren’t enough data points to conclude any distribution.
So how do you know that stock out will happen? in n days from now?
As long as you can explain the non-linear relationship between Service Level and Inventory Levels. you are half a supply chain consultant. Boston Consulting Group (BCG) kinds.
If you are above 40, thats all the math, you can understand. and they can follow
Rest is too much math. ChatGPT can tell you. If you know what questions to ask.
