Patent ID: 8165904
Filing Date: 2012-04-24
Classification: G06Q,Y02P

Abstract:
1. A method of allocating inventory across a plurality of locations in a supply chain, the method comprising: calculating using a computer of a warehouse management system a baseline inventory for one or more items at each location in the supply chain based on expected values for demand for each of the one or more items and lead time for each location in the supply chain; making a first adjustment to an inventory level for each item at each location using the computer of the warehouse management system, the first adjustment based on the baseline inventory; calculating using the computer of the warehouse management system a total time-phased inventory and target safety stock level for each of the one or more items at each location in the supply chain based on the baseline inventory, a target service level, a demand uncertainty level for each of the one or more items, a lead time uncertainty level for each location in the supply chain carrying costs in the supply chain, a maximum safety stock value, and a maximum postponement value, and wherein calculating the total time-phased inventory and target safety stock level further comprises calculating a risk pooling factor based on the maximum postponement value and propagating the demand uncertainty levels for each of the one or more items and the lead time uncertainty for each location across the supply chain; making a second adjustment to the inventory level for each item at each location using the computer of the warehouse management system, the second adjustment based on the inventory level of each item at each location after the first adjustment and the total time-phased inventory and target safety stock level for each of the one or more items; calculating using the computer of the warehouse management system a constrained safety stock level for each of the one or more items at each location in the supply chain based on the target safety stock level, one or more user constraints, and a profitability of storing each item at each location in the supply chain; making a third adjustment to the inventory level for each item at each location using the computer of the warehouse management system, the third adjustment based on the inventory level of each item at each location after the second adjustment and the constrained safety stock level for each of the one or more items; calculating using the computer of the warehouse management system production, procurement and transfer supplies to achieve the constrained safety stock level for each of the one or more items at each location in the supply chain based on the one or more user constraints; and making a fourth adjustment to the inventory level for each item at each location using the computer of the warehouse management system, the fourth adjustment based on the inventory level of each item at each location after the third adjustment and the production, procurement, and transfer supplies.