What is 'inventory optimization' in SAP SCM-IBP-INV - Inventory?

inventory optimization - Overview

• Component: SCM-IBP-INV

• Component Name: Inventory

• Description: The science of calculating inventory targets to meet desired service goals at the lowest inventory cost possible across the entire supply chain.

inventory optimization - Details

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  Key Concepts: 
  Inventory optimization is a component of SAP's Supply Chain Management (SCM) suite of products. It helps companies optimize their inventory levels by providing insights into inventory performance and helping to identify areas for improvement. It also helps to reduce costs associated with inventory management, such as storage and transportation costs. 
  
  How to use it: 
  Inventory optimization can be used to identify areas of improvement in inventory management. It can be used to analyze current inventory levels, identify potential risks, and develop strategies for reducing costs associated with inventory management. It can also be used to forecast future demand and plan for future inventory needs. 
  
  Tips & Tricks: 
  When using inventory optimization, it is important to consider the cost of holding inventory versus the cost of not having enough inventory. Additionally, it is important to consider the cost of ordering too much or too little inventory. Finally, it is important to consider the impact of seasonal demand on inventory levels. 
  
  Related Information: 
  Inventory optimization is closely related to other components of SAP's SCM suite, such as demand planning and supply chain planning. Additionally, it is related to other aspects of supply chain management, such as warehouse management and transportation management.