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Project Proposal

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8 views1 page

Project Proposal

Uploaded by

lyhouret1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1.

Introduction to Inventory Optimization: This involves managing stock levels to meet


customer demand without overstocking or understocking. Imagine a bookstore: Too many
copies of an unpopular book mean higher storage costs, while too few bestsellers lead to
missed sales.
2. Demand Forecasting: This is predicting future customer demand using past data. For
instance, a clothing store might analyze last year’s winter sales to decide how many coats to
stock this year.
3. Safety Stock: Extra inventory kept to prevent stockouts. A supermarket might keep extra
canned goods in case of unexpected high demand, like before a big storm.
4. Economic Order Quantity (EOQ): A formula to find the ideal order quantity that minimizes
total costs, including ordering and holding costs. Think of a bike shop ordering a specific number
of bikes to balance the costs of ordering with storage.
5. Just-In-Time (JIT) Inventory: A system where materials arrive exactly when needed, reducing
inventory costs. A car manufacturer using JIT would get parts delivered right before assembly,
minimizing storage needs.
6. ABC Analysis: This method divides inventory into three categories:
• A-items: High value, low quantity. Example: A luxury watch in a jewelry store.
• B-items: Moderate value and quantity. Example: Silver rings.
• C-items: Low value, high quantity. Example: Costume jewelry.
This helps prioritize management efforts on the most valuable items.
7. Technological Solutions: Technology like inventory management software and AI can
automate tracking stock levels, predicting demand, and placing orders. For example, a grocery
store might use software to automatically reorder milk when inventory gets low.
8. Case Studies and Real-World Examples: Look at businesses that have successfully optimized
their inventory. For instance, Toyota is famous for its Just-In-Time system, reducing waste and
improving efficiency by only ordering parts as needed.

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