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Demand-Driven Inventory Optimization

This project focuses on optimizing inventory management within supply chains by predicting demand using data mining models, specifically a Back propagation neural network. It compares a traditional inventory policy based on historical sales data to a new policy derived from demand predictions, demonstrating that the latter significantly reduces total inventory costs. The study highlights the importance of balancing inventory levels to minimize both excess stock and stock-outs.

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Mohamed Ansar
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18 views1 page

Demand-Driven Inventory Optimization

This project focuses on optimizing inventory management within supply chains by predicting demand using data mining models, specifically a Back propagation neural network. It compares a traditional inventory policy based on historical sales data to a new policy derived from demand predictions, demonstrating that the latter significantly reduces total inventory costs. The study highlights the importance of balancing inventory levels to minimize both excess stock and stock-outs.

Uploaded by

Mohamed Ansar
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

A PREDICTION-BASED INVENTORY OPTIMIZATION USING DATA

MINING MODELS

ABSTRACT

This project as the core of the supply chain management, the inventory management
deserves more of our attention, and in the complicated supply chain, especially under the
circumstance of spending a long cycle, the inventory management becomes very difficult,
which we need to balance the amount of circulating funds used by overmuch inventory and
the loss of stock-out.

The demand of marketing is viewed as the foundation of the inventory management,


so in this project, we are to adopt this idea and combine it with the information of searching
on the web to conduct demand prediction for inventory optimization, and we will use Back
propagation neural network to train the prediction model. Then on the basis of prediction
result, we will establish one simple and concise inventory policy.

As a comparison result, a traditional inventory policy will be figured out by


estimating a normal distribution of demand using the history sales data, and calculate the
inventory cost with inventory strategy. The result shows that the established inventory policy
based on demand prediction has obvious superiority on reducing the total cost of inventory.

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