Inventory management maximization based on sales forecast: case study

Abstract

The major purpose of this paper is to present a concept for reliable planning of the sales of small firms, where the large number of product variants complicates the implementation of this kind of system considerably. First, a methodology is presented to set up sales forecasting so that it can be integrated into the inventory management process. This inventory management software interprets forecasting information and provides users with a decision support system to minimize stocks in stores while at the same time avoiding missed sales. It is best applied in company types requiring high precision inventories, notably those in the textile industry; a large range of patterns are produced with many small variations (colors, size, customizations, etc.) and these products have a limited lifetime. Inventory management is difficult due to the multitude of products to account for and the necessity to sell them quickly. The methodology is intended for inventory management at the end of the supply chain. In store, the number of references, their similarities and the necessity to minimize unsold stock greatly complicates the reordering and restocking process. These types of companies do not easily lend themselves to classic techniques of sales forecasting and require specialized methods to estimate their needs precisely.