Inventory Optimization

Categories: Optimisation
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About Course

This course provides an in-depth understanding of inventory optimization techniques and strategies to improve supply chain performance. The course will cover the principles of inventory management, including forecasting, demand planning, and safety stock, as well as advanced inventory optimization methods such as stochastic inventory models, multi-echelon inventory optimization, and collaborative planning, forecasting and replenishment (CPFR). The course will also discuss the role of technology in inventory optimization and emerging trends in inventory management.

Course Outline:

  1. Introduction to Inventory Optimization
  • Definition of Inventory Optimization
  • Importance of Inventory Optimization in Supply Chain
  • Key Inventory Management Concepts
  1. Demand Forecasting and Planning
  • Demand Forecasting Techniques
  • Sales and Operations Planning (S&OP)
  • Collaborative Planning, Forecasting and Replenishment (CPFR)
  1. Safety Stock and Service Level Analysis
  • Safety Stock Calculation and Analysis
  • Service Level Analysis and Optimization
  • Stockout Cost and Risk Management
  1. Stochastic Inventory Models
  • Single-Period Inventory Model
  • Multi-Period Inventory Model
  • Dynamic Inventory Model
  1. Multi-Echelon Inventory Optimization
  • Inventory Optimization Across Multiple Sites
  • Centralized vs. Decentralized Inventory Management
  • Strategic Inventory Placement
  1. Technology and Emerging Trends in Inventory Optimization
  • Role of Technology in Inventory Optimization
  • Internet of Things (IoT) and Inventory Management
  • Emerging Trends in Inventory Optimization



  • Basic knowledge of supply chain management concepts and principles
  • Familiarity with Excel or other data analysis tools

Recommended Textbook:

  • “Inventory Management: Principles, Concepts, and Techniques” by Martin K. Starr.


  • Midterm Exam (30%)
  • Final Exam (40%)
  • Group Project (30%)

Note: The course syllabus and assessment methods are subject to change based on instructor’s discretion.

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What Will You Learn?

  • 1. Understand the role of inventory optimization in supply chain management and business strategy.
  • 2. Analyze demand patterns and apply forecasting and planning techniques to optimize inventory levels.
  • 3. Develop and apply safety stock and service level analysis methods to minimize stockout risk and cost.
  • 4. Apply stochastic inventory models, such as single-period, multi-period, and dynamic models, to optimize inventory performance.
  • 5. Apply multi-echelon inventory optimization methods to optimize inventory across multiple sites and improve supply chain performance.
  • 6. Evaluate the role of technology in inventory optimization, including IoT and emerging trends in inventory management.

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