Apply, Simulate, and Optimize Inventory Policies (using Excel)
What will you learn?
What you’ll learn
- How to simulate, optimize, select, and apply inventory policies.
- How to optimize inventory policies to minimize costs.
- How to optimize policies to find the perfect trade-off between inventory and service levels.
- How to assess service level.
- How forecasts interact with inventory policies.
- How to select an inventory policy based on historical demand and forecast patterns.
- How to simulate inventory policies.
Course Content
- Introduction –> 2 lectures • 4min.
- Balancing Inventory Levels –> 2 lectures • 7min.
- Service Levels –> 1 lecture • 4min.
- Supply Chain Costs –> 2 lectures • 9min.
- Inventory Policies – Theory –> 6 lectures • 17min.
- Part 1 – Using Inventory Policies –> 1 lecture • 5min.
- Part 2 – Simulating Policies –> 1 lecture • 2min.
- Safety Stock Formula –> 1 lecture • 9min.
- Optimizing Policies –> 2 lectures • 6min.
- Conclusion and Next Steps –> 1 lecture • 2min.
Requirements
What will you learn?
In this course, using Excel templates, you will learn how to
- Apply inventory policies
- Simulate them using historical demand and forecast data
- Optimize policies based on cost or service/inventory trade-offs
These templates can then be easily tweaked for your own products and data.
How is this course different?
I have been teaching inventory optimization to master students at the university (in Brussels, Belgium, and then Paris, France) and to professionals since 2015.
Most inventory optimization courses focus on solving equations, such as the Economic Order Quantity (EOQ), safety stocks, and newsvendor models. Not this one.
Over the years, I have drastically changed how I taught inventory optimization and utilize inventory policies because my experience delivering models to my clients taught me that,
- Being able to solve a formula doesn’t mean that you know how to apply it in practice.
- Even if you can properly apply a formula, the underlying theory doesn’t apply in practice.
- Other models – that don’t rely on specific theoretical foundations – usually deliver more value.
So I changed
- The content of my course: from theory-driven to simulation-driven,
- How I taught it: from a focus on equations to a focus on ‘how do you apply this in practice using real-life data’
My objective is that by the end of this course, you will be able to,
- Simulate different policies using your own data
- Optimize them
- Select the one that best fits your objective (cost, service level) based on your own data (historical demand and forecast)
What deliverables do you get?
- Excel templates that you can use with your own data
- Corrected templates for all exercises and simulations
- All the slides
What’s not covered in this course?
- EOQ optimization and model
- Newsvendor model
Pre-requisites
- Excel intermediate level – The course includes a brief introduction to the Excel Solver
- How to compute the RMSE (see my other course) – The course includes a brief reminder on how to compute RMSE.
How much content is in this course?
- 1h50 of videos (including theory, discussions, and corrections)
- Depending on your Excel proficiency, approximately 4 to 8 hours of personal work (including mostly simulations in Excel and a bit of theory)