stochastic-inventory-models

What problem does it solve?

This Skill helps manage inventory when demand is unpredictable, ensuring you have enough stock to meet customer needs without excessive holding costs.

Core Features & Use Cases

• Stochastic Modeling: Accurately models inventory systems with uncertain demand and lead times.
• Policy Optimization: Determines optimal ordering policies like (Q,r) and (R,S) to balance costs and service levels.
• Safety Stock Calculation: Calculates the necessary buffer stock to protect against demand fluctuations.
• Use Case: A retailer wants to minimize stockouts during peak seasons while avoiding overstocking. This Skill can calculate the optimal reorder point and order quantity to achieve a 95% service level.

Quick Start

Use the stochastic-inventory-models skill to calculate the optimal (Q,r) policy for a product with daily demand mean of 100, std dev of 20, lead time of 7 days, holding cost of $2, ordering cost of $200, and backorder cost of $10, targeting a 95% service level.