Patent ID: 8428987

Claim:
A method of optimizing inventory, comprising: generating, using a computer, one or more end node demand streams in a supply chain, each end node demand stream comprising a time series of demands at an end node in the supply chain forecasted over one or more time periods; organizing, using the computer, one or more order lead time groups that characterize an order lead time of each of the one or more end node demand streams; calculating, using the computer, an order lead time probability distribution for each order lead time group; retrieving, using the computer, a supply path in the supply chain for the end node of each end node demand stream; calculating, using the computer, a cumulative supply lead time for each inventory-carrying node upstream from the end node in the supply path of each end node demand stream; dividing, using the computer, the order lead time probability distribution of each order lead time group into order lead time segments corresponding to each supply lead time, each order lead time segment representing a portion of the supply chain that allows for distribution of order lead times and demand upstream in the supply chain; redistributing, using the computer, demand to at least one of the order lead time segments upstream in the supply chain for each of the one or more end node demand streams; and calculating, by the computer, inventory targets at each inventory-carrying node in the supply chain.