Demand Planning and Inventory Optimization
Integrated Model for Demand Forecasting, Merchandise Replenishment and Inventory Optimization
One of the key drivers of efficiency for Retail organizations is the ability to optimize inventory to align with demand. Retailers must ensure to have sufficient inventory on hand to satisfy demand but not to overstock and tie up working capital that could result in loss of margin down the road.
Our solution for merchandise replenishment draws on the depth of the IBM Data and AI portfolio and combines two powerful components in a fully integrated model:
- SPSS Statistics is a powerful statistical engine that provides a robust set of algorithms to help predict future demand using historical trends and user assumptions
- IBM Planning Analytics supports the review, collaboration and analysis required to effectively manage what is often times thousands of SKUs and drive efficient purchasing actions
The solution includes the following key components:
- Demand forecasting using statistical modeling
- Consideration of special events, pricing and promotions and the impact on demand
- User driven assumptions of inventory levels and lead times for purchase quantity calculations
- Minimum Order Quantity (MOQ) and other adjustment considerations to calculate required quantities
- Planning and adjustments at the SKU, Brand or other levels
- Long term projections as well as committed orders
- Various inventory optimization strategies including desired sell-through, minimum inventory level and others
- What-if and scenario planning to explore different demand and purchasing scenarios
Contact us by filling out the form on this page to discuss the solution in more detail.