OPM 502: Inventory Management

Contents
Inventory management is a core element of any company’s supply chain management activities. Yet, deciding on the right amount of inventory, in a given setting, is a challenging task. For many companies, inventory ties up a huge amount of capital. To set appropriate inventory levels, companies must trade off inventory costs and benefits. While inventory costs tend to be readily visible, measuring inventory benefits is more demanding, in general. Business analytics tools and techniques are of great value to master these challenges. This course introduces such approaches. It structures the analysis by distinguishing different inventory drivers. For each driver, it first highlights the underlying economic trade-offs and then introduces and analyses quantitative models that allow to optimize them. Core topics include demand forecasting, lot sizing, safety stocks, and seasonal inventory. The course also addresses the interplay between the sales and operations functions of a firm.

Learning outcomes
In this course, students will learn how inventory can be used to manage supply chain performance. They will be able to distinguish different inventory roles in different supply chain environments. Students will become acquainted with relevant business analytics techniques and will understand how to apply them to address inventory management tasks. In conclusion, the course enables students to analyze inventory systems quantitatively and to determine the right inventory levels to achieve given performance objectives. Students will also gain insights into the interdependencies between the sales and operations functions of a firm.

Necessary prerequisites
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Recommended prerequisites
Basic knowledge in operations management (e.g. BSc course “OPM 301 Operations Management”), basic knowledge in mathematics (including Linear Programming), and in statistics (probability distributions).

Examiner Performing lecturer

Prof. Dr. Eunji Lee Eunji Lee