System and method for calculation of controlling parameters for a computer based inventory management

• US 20020188529A1
• Filed: 05/17/2002
• Published: 12/12/2002
• Est. Priority Date: 04/07/1997
• Status: Abandoned Application

• Current Assignee: Maarten Krever
• Original Assignee: Maarten Krever
• Inventors: Krever, Maarten
• Application Number:
  US10/146,958
• Publication Number:
  US 20020188529A1
• Time in Patent Office: Days
• US Class Current: 705/28
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders

Abstract

A system designed for the calculation of control parameters for a computer based inventory management system according to the present invention comprises a computer program based on mathematical probabilities using statistical distribution functions. In the context of the invention a computer based inventory management system comprises an inventory management program system such as TRITON® as supplied by Baan BV, The Netherlands, running on a computer consisting of at least one processor, memory, input and output.

Claims

1. A method of maintaining an inventory of an item for which a statistical history of individual demands for the item is known, the method comprising the steps of:

first determining, independently of time and based on the history of individual demands, a probability distribution P(Q) of a quantity of an individual demand that is independent of time, including a mean value E(Q) and a variance Var(Q);

second determining a variance of consumption Var(R) based on the determined P(Q);

third determining at least one of when to place an order and a size of an order for the item, based on the determined variance of consumption Var(R); and

placing an order for the item at the determined time or of the determined size, based on the results of the third determining step.

2. The method of claim 1, further comprising the step of determining, from the history of individual demands, a distribution function of time between the individual demands, and wherein the determination of the variance of consumption Var(R) is further based on the determined distribution function of time between the individual demands.

3. The method of claim 2, further comprising the step of determining a probability distribution of a first time period L prior to receipt of the order, the first time period being one of a lead time, a production time of the item, a fixed reorder period, and wherein the determination of the variance of consumption Var(R) is further based on the determined probability distribution of the first time period L.

4. The method of claim 3, wherein the variance of consumption Var(R) is determined from the following,

Var(R)=A2×

E(L)×

Var(Q)+A3×

E(L)×

E(Q)²+A4×

E(Q)²×

Var(L)

where A2, A3, A4 are parameters depending on the distribution function of the time between demands, E(L) and Var(L) are the mean value and variance of the first time period L, and E(Q) and Var(Q) are the mean value and variance of P(Q).

5. The method of claim 4, wherein A2=A3=A4

where A2 is the number of single demands per time unit.

6. The method of claim 3, wherein the variance of consumption is derived from P(R), a probability function of consumption that is determined from the following

7. The method of claim 3, wherein the variance of consumption is derived from P(R), a probability function of consumption that is determined from the following

8. A method of maintaining an inventory of an item for which a statistical history of individual demands for the item is known, the method comprising the steps of:

first determining, from the history of individual demands and without sampling over time intervals, a probability distribution P(Q) of a quantity of an individual demand;

second determining, from the history of individual demands, a distribution function of time between the individual demands;

third determining a probability distribution of a first time period prior to receipt of an order for the item, the first time period being one of a lead time, a production time of the item, and a reorder period;

fourth determining a variance of consumption based on the determined P(Q), the determined distribution of time between the individual demands, and the determined probability distribution of the first time period;

fifth determining at least one of when to place an order and a size of an order for the item, based on the determined variance of consumption; and

placing an order for the item at the determined time or of the determined size, based on the results of the fifth determining step.

9. The method of claim 8, wherein the variance of consumption is Var(R) and is determined from the following,

Var(R)=A2×

E(L)×

Var(Q)+A3×

E(L)×

E(Q)²+A4²×

E(Q)²×

Var(L)

where A2, A3, A4 are parameters depending on the distribution function of the time between demands, E(L) and Var(L) are the mean value and variance of the first time period, and E(Q) and Var(Q) are the mean value and variance of the P(Q).

10. The method of claim 9, wherein A2=A3=A4

where A2 is the number of single demands per time unit.

11. The method of claim 8, wherein the variance of consumption is derived from P(R), a probability function of consumption that is determined from the following

12. The method of claim 8, wherein the variance of consumption is derived from P(R), a probability function of consumption that is determined from the following

14. The method of claim 13, wherein A2=A3=A4

where A2 is the number of single demands per time unit.

13. A method of maintaining an inventory of an item for which a statistical history of individual demands for the item is known, the method comprising the steps of:

first determining, from the history of individual demands, a probability distribution P(Q) of a quantity of an individual demand;

second determining a variance of consumption from the following,

Var(R)=A2×

E(L)×

Var(Q)+A3×

E(L)×

E(Q)²+A4×

E(Q)²×

Var(L)

where A2, A3, A4 are parameters depending on a distribution function of a time between individual demands, E(L) and Var(L) are the mean value and variance of a first time period before receipt of an order, and E(Q) and Var(Q) are the mean value and variance of the P(Q);

third determining at least one of when to place an order and a size of an order for the item, based on the determined variance of consumption; and

placing an order for the item at the determined time or of the determined size, based on the results of the third determining step.