Guides with formulas, worked examples and calculators on demand forecasting, safety stock, reorder point, economic order quantity, ABC/XYZ analysis and inventory turnover.
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These guides explain the core calculations of inventory planning with formulas and step-by-step examples. The formulas are the same ones VidiStock uses in the application; in the guides with a calculator you can enter your own figures and see the result immediately. The calculators run in your browser and the values you enter are sent nowhere.
Suggested reading order:
What is demand forecasting: where everything starts; how a forecast and its error are measured.
Safety stock: how much buffer to keep against uncertainty.
Reorder point: when to order.
Economic order quantity: how much to order each time.
ABC/XYZ analysis: how much effort each product deserves.
Inventory turnover: how fast the money in stock turns.
What demand forecasting is, demand patterns, which method is used when, and how forecast error is measured with WAPE, bias and MASE; with a worked example.
How safety stock is calculated from demand and lead time uncertainty for a service level; the formula, choosing a service level and a step-by-step example.
The reorder point formula, why the stock position is more than stock on hand, how the order quantity is found and how stock-out risk is detected; with an example.
The economic order quantity formula, the balance between ordering cost and holding cost, a step-by-step example and an EOQ calculator that runs in your browser.
How ABC analysis classifies by value share and XYZ analysis by demand variability; thresholds, a worked example and recommended stock policies for the nine classes.
Inventory turnover and days-of-inventory formulas, movement classes, ideal turnover and the cost of money tied up in stock; with an example and a calculator that runs in your browser.
