Category Archives: Quantitative Methods

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Driving Risk Out of S&OP Forecasts

MIT’s Supply Chain blog presented a nice research study by Minhaaj Khan and Srideepti Kidambi and supervised by Dr. Tugba Efendigil.  Their study is a good example of using less data rather than more to design a simple readily explainable approach that increases profits while reducing errors in ordering.  It’s an easy win.  Will it work in all scenarios? No, probably not.  But it also doesn’t take long to try and implement.  Occam’s Razor in action. It’s interesting they did not even need to know about promotions to achieve their gains. In many businesses the promotions can wreck plans. But in this consumer product it turns out they don’t disrupt.

Big data can sometimes confuse us rather than enlighten.

scamit-logo  via Driving Risk Out of S&OP Forecasts

 

Metro Monitor 2018

This article discusses differences between cities and sectors around the country in terms of economics and demographics.  The authors show that economic divides are increasing between geographic areas.  There are a great many numbers which show these trends. Authors are Chad ShearerIsha ShahAlec Friedhoff, and Alan Berube;  and date is 

screenshot-www.brookings.edu 2018-01-25 13-18-03-392  via Metro Monitor 2018

Are You Keeping the Right Amount of Inventory?

An interesting case study of inventory. You can see that it still is an issue of great importance to businesses.

Accurate knowledge of demand flow is very important in predicting the amount of inventory to carry, if the product is selling fairly frequently.

The authors found that a few big customers were placing unusual big orders and that was driving outages.  We’ve known this for 30 or more years; I observed it at a disk drive company I was product manager for in Silicon Valley. Manage the big orders and you manage inventory.

But that does not reduce the value of inventory models and predictions of service level.

 

 

via Are You Keeping the Right Amount of Inventory?