SAP Integrated Business Planning for inventory recommends total inventory targets to maximize profit while buffering for uncertainty and maintaining customer service levels. Inventory optimization helps manage uncertainty in the supply chain by determining the amount of safety stock to hold at stocking locations within the supply chain.This part of the video focuses on the various variability that inventory optimizer considers while planning safety stock recommendation. This includes 4 variations or better known as forecast error CV, supply lead time variation as well as production lead time variation. we are going to cover at a high level what this variabilities are how and what are the best practice to determine these variation and covariance and how to use them as an input for a better and more accurate inventory optimization run.
