Management Tools for Random Demand Inventory and Supply

Abstract

A mathematical management model’s added value is obtained only after the design and implementation of a user-friendly operating and usage tool. Fol-lowing work on developing an automated inventory management system and/or supplies, a dynamic model for the rational management of product stocks was established. Its implementation aims to limit or eliminate over-stocking and/or stock depletion. The orderable quantity prediction tool based on a settable and preset time period demonstrates the added value of incorporating probabilistic mathematical principles into supply management processes. In this context, this article discusses aspects of the design and implementation of random demand management algorithms based on Mar-kov chains. The goal is to forecast the state or behavior of goods marketing company’s product stocks and to develop a user supply management inter-face. The latter’s functional application will ultimately demonstrate the ac-curacy of the model. This paper also looks at how to use Markov chains to predict the reliability of any technical device, as well as how to implement an automated system with the desired technical specifications.