Inventory Optimization types

Inventory Optimization supports several specific optimization types:

• Safety Stock Optimization – Safety Stock Optimization calculate the required safety stock taking into account demand and lead-time variability. The result of Safety Stock Optimization is summarized in the Inventory Summary output table.
• Service Level Optimization – This optimization type selects the optimal service level for each finished good within a user-defined product set at a customer-facing site to achieve a specific objective. The objectives include minimize cost, maximize profit, maximize revenue and maximize average service level. It requires that Safety Stock Optimization has already been run since safety stock placement must already be determined. Service Level Optimization results are provided in the Service Level Optimization Summary table.
• Safety Stock + Service Level Optimization – Use this optimization type to run Safety Stock Optimization followed by Service Level Optimization.
• Safety Stock Optimization Infeasibility Diagnosis – If Safety Stock Optimization returns an infeasibility, you can use Safety Stock Optimization Infeasibility Diagnosis to detect what sets of constraints are causing the infeasibility.

In addition, you can use Simulation to validate the results of Safety Stock Optimization. For complete information, refer to Testing Safety Stock Optimization using Simulation.