Determining an inventory target for a node of a supply chain
View Patent ↗Determining an inventory target for a node of a supply chain includes calculating a demand stock for satisfying a demand over supply lead time at the node of the supply chain, and calculating a demand variability stock for satisfying a demand variability of the demand over supply lead time at the node. A demand bias of the demand at the node is established. An inventory target for the node is determined based on the demand stock and the demand variability stock in accordance with the demand bias.
1. A computer-implemented method of determining an inventory target of a node of a supply chain, comprising:
calculating by a computer, a demand stock that satisfies a demand over supply lead time at a node of a supply chain, the supply lead time represents a period of time to provide a supply to the node from another node of the supply chain;
calculating by the computer, a demand variability stock that satisfies a demand variability of the demand over supply lead time at the node;
establishing by the computer, a demand bias of the demand at the node; and
determining by the computer, an inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
changing a first supply parameter associated with the node;
changing a first demand parameter associated with the node;
changing a second demand parameter associated with the node, the change in the second demand parameter associated with a second demand cost;
comparing the second demand cost and a second supply benefit;
changing a third supply parameter associated with the node, the change in the third supply parameter associated with a third supply cost;
comparing the third supply cost and a third demand benefit; and
determining the inventory target of the node according to the change in the first supply parameter, the change in the first demand parameter, the comparison of the second demand cost and the second supply benefit, and the comparison of the third supply cost and the third demand benefit.
2. The method of claim 1 , wherein determining the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias comprises:
establishing that a predicted demand is less than an actual demand; and
using the demand stock but not the demand variability stock in determining the inventory target.
3. The method of claim 1 , wherein determining the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias comprises:
detecting a difference in a second supply parameter according to the change in the second demand parameter, the difference in the second supply parameter associated with a second supply benefit.
4. The method of claim 1 , wherein determining the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias comprises:
detecting a difference in a third demand parameter according to the change in the third supply parameter, the difference in the third demand parameter associated with a third demand benefit.
5. The method of claim 1 , further comprising:
generating a demand forecast;
determining the demand over supply lead time from the demand forecast; and
determining the demand variability of the demand over supply lead time from the demand forecast.
6. The method of claim 1 , further comprising:
identifying a business model associated with the supply chain; and
determining the inventory target of the node in accordance with the business model.
7. A system of determining an inventory target of a node of a supply chain, comprising:
a database that stores information comprising a demand over supply lead time at a node of a supply chain and a demand variability of the demand over supply lead time at the node; and
a computer system coupled with the database and configured to:
calculate a demand stock that satisfies the demand over supply lead time at the node of the supply chain, the supply lead time represents a period of time to provide a supply to the node from another node of the supply chain;
calculate a demand variability stock that satisfies the demand variability of the demand over supply lead time at the node;
establish a demand bias of the demand at the node; and
determine an inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
changing a first supply parameter associated with the node;
changing a first demand parameter associated with the node;
changing a second demand parameter associated with the node, the change in the second demand parameter associated with a second demand cost;
comparing the second demand cost and a second supply benefit;
changing a third supply parameter associated with the node, the change in the third supply parameter associated with a third supply cost;
comparing the third supply cost and a third demand benefit; and
determining the inventory target of the node according to the change in the first supply parameter, the change in the first demand parameter, the comparison of the second demand cost and the second supply benefit, and the comparison of the third supply cost and the third demand benefit.
8. The system of claim 7 , wherein the computer system is further configured to determine the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
establishing that a predicted demand is less than an actual demand; and
using the demand stock but not the demand variability stock in determining the inventory target.
9. The system of claim 7 , wherein the computer system is further configured to determine the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
detecting a difference in a second supply parameter according to the change in the second demand parameter, the difference in the second supply parameter associated with a second supply benefit.
10. The system of claim 7 , wherein the computer system is further configured to determine the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
detecting a difference in a third demand parameter according to the change in the third supply parameter, the difference in the third demand parameter associated with a third demand benefit.
11. The system of claim 7 : wherein the computer system is further configured to:
generate a demand forecast;
determine the demand over supply lead time from the demand forecast; and
determine the demand variability of the demand over supply lead time from the demand forecast.
12. The system of claim 7 , wherein the computer system is further configured to:
identify a business model associated with the supply chain; and
determine the inventory target of the node in accordance with the business model.
13. A non-transitory computer-readable medium embodied with software for determining an inventory target of a node of a supply chain, the software when executed by a computer configured to:
calculate a demand stock that satisfies a demand over supply lead time at a node of a supply chain, the supply lead time represents a period of time to provide a supply to the node from another node of the supply chain;
calculate a demand variability stock that satisfies a demand variability of the demand over supply lead time at the node;
establish a demand bias of the demand at the node; and
determine an inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
changing a first supply parameter associated with the node;
changing a first demand parameter associated with the node;
changing a second demand parameter associated with the node, the change in the second demand parameter associated with a second demand cost;
comparing the second demand cost and a second supply benefit;
changing a third supply parameter associated with the node, the change in the third supply parameter associated with a third supply cost;
comparing the third supply cost and a third demand benefit; and
determining the inventory target of the node according to the change in the first supply parameter, the change in the first demand parameter, the comparison of the second demand cost and the second supply benefit, and the comparison of the third supply cost and the third demand benefit.
14. The computer-readable medium software of claim 13 , wherein the software is further configured to determine the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
establishing that a predicted demand is less than an actual demand; and
using the demand stock but not the demand variability stock in determining the inventory target.
15. The computer-readable medium of claim 13 , wherein the software is further configured to determine the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
detecting a difference in a second supply parameter according to the change in the second demand parameter, the difference in the second supply parameter associated with a second supply benefit.
16. The computer-readable medium of claim 13 , wherein the software is further configured to determine the inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
detecting a difference in a third demand parameter according to the change in the third supply parameter, the difference in the third demand parameter associated with a third demand benefit.
17. The computer-readable medium of claim 13 , wherein the software is further configured to:
generate a demand forecast;
determine the demand over supply lead time from the demand forecast; and
determine the demand variability of the demand over supply lead time from the demand forecast.
18. The computer-readable medium of claim 13 , wherein the software is further configured to:
identify a business model associated with the supply chain; and
determine the inventory target of the node in accordance with the business model.
19. A system of determining an inventory target of a node of a supply chain, comprising:
means for calculating a demand stock that satisfies a demand over supply lead time at a node of a supply chain;
means for calculating a demand variability stock that satisfies a demand variability of the demand over supply lead time at the node;
means for establishing a demand bias of the demand at the node; and
means for determining an inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias by:
changing a first supply parameter associated with the node;
changing a first demand parameter associated with the node;
changing a second demand parameter associated with the node, the change in the second demand parameter associated with a second demand cost;
comparing the second demand cost and a second supply benefit;
changing a third supply parameter associated with the node, the change in the third supply parameter associated with a third supply cost;
comparing the third supply cost and a third demand benefit and
determining the inventory target of the node according to the change in the first supply parameter, the change in the first demand parameter, the comparison of the second demand cost and the second supply benefit, and the comparison of the third supply cost and the third demand benefit.
20. A computer-implemented method of determining an inventory target of a node of a supply chain, comprising:
generating by a computer, a demand forecast of a supply chain;
determining by the computer, a demand over supply lead time at a node of the supply chain from the demand forecast;
determining by the computer, a demand variability of the demand over supply lead time from the demand forecast;
calculating by the computer, a demand stock that satisfies the demand over supply lead time at the node, the supply lead time represents a period of time to provide a supply to the node from another node of the supply chain;
calculating by the computer, a demand variability stock that satisfies the demand variability of the demand over supply lead time at the node;
establishing by the computer, a demand bias of the demand at the node;
identifying by the computer, a business model associated with the supply chain; and
determining by the computer, an inventory target of the node based on the demand stock and the demand variability stock in accordance with the demand bias and the business model by:
changing by the computer, a first supply parameter associated with the node;
changing by the computer, a first demand parameter associated with the node;
changing by the computer, a second demand parameter associated with the node, the change in the second demand parameter associated with a second demand cost;
detecting by the computer, a difference in a second supply parameter according to the change in the second demand parameter, the difference in the second supply parameter associated with a second supply benefit;
comparing by the computer, the second demand cost and the second supply benefit;
changing by the computer, a third supply parameter associated with the node, the change in the third supply parameter associated with a third supply cost;
detecting by the computer, a difference in a third demand parameter according to the change in the third supply parameter, the difference in the third demand parameter associated with a third demand benefit;
comparing by the computer, the third supply cost and the third demand benefit;
establishing by the computer, that a predicted demand is less than an actual demand;
using by the computer, the demand stock but not the demand variability stock in determining the inventory target; and
determining by the computer, the inventory target of the node according to the change in the first supply parameter, the change in the first demand parameter, the comparison of the second demand cost and the second supply benefit, and the comparison of the third supply cost and the third demand benefit.