Automated system for evaluating the sensitivity of inventory costs due to fluctuations in customer demand

• US 4,887,207 A
• Filed: 12/29/1987
• Issued: 12/12/1989
• Est. Priority Date: 12/29/1987
• Status: Expired due to Fees

• Current Assignee: International Business Machines Corporation
• Original Assignee: International Business Machines Corporation
• Inventors: Natarajan, Bharath
• Primary Examiner(s): Jablon, Clark A.
• Application Number:
  US07/138,781
• Time in Patent Office: 714 Days
• Field of Search: 364/403, 364/401, 364/468, 364/300, 235/385
• US Class Current: 705/7.29
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
• CPC Class Codes: G06Q 10/06375 Prediction of business process outcome or impact based on a proposed change
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 30/0201 Market modelling; Market analysis; Collecting market data
• CPC Class Codes: Y02P 90/80 Management or planning
• CPC Class Codes: Y10S 706/904 Manufacturing or machine, e.g. agricultural machinery, machine tool

Abstract

An automated inventory management system is provided which is easy to use and user friendly to evaluate the impact of customer demand changes on inventory. For a given item, the system automatically defines an inventory model by accessing an engineering planning database. The system identifies the on-hand raw material inventory and evaluates the work-in-process inventory from the model. The system then accesses an inventory database to identify the finished goods inventory and automatically consolidates all inventory and computes the total impact. The system also provides the practicing manager necessary control limits on raw material and work-in-process inventory dollars to complete a given finished product and establishes the required inventory turns. The user can use the system to compare against acutals and take appropriate action to correct any process deficiencies. This provides the capability to evaluate inventory sensitivity to customer demand and can be used to better serve the customer and his needs.

Claims

1. An automated method implemented on a computer for evaluating sensitivity of inventory cost to fluctuations in customer demand, said method providing an inventory cost analysis due to fluctuations in customer demand and comprising the steps of:

inputting planning parameter data describing inventory for a manufacturing process;

evaluating an inventory model of the manufacturing process based on said planning parameter data;

providing a data input screen for inputting revised demand values;

calculating inventory impact values for work-in-process inventory based on input revised demand values and the evaluation of said inventory model; and

generating a report of said inventory impact values.

2. The automated method as recited in claim 1 wherein the step of inputting is performed by retrieving said planning parameter data from a database.

3. The automated method as recited in claim 1 wherein the step of inputting is performed by manually loading said planning parameter data.

4. The automated method as recited in claim 1 wherein said step of evaluating is performed by the steps of:

calculating inventory cost data over a period of time; and

generating a histogram showing cumulative inventory costs over said period of time.

5. The automated method as recited in claim 4 further comprising the step of displaying said histogram.

6. The automated method as recited in claim 1 further comprising the step of determining if alternative new revised demand values are to be input, and if so, repeating said steps of providing a data input screen, calculating inventory impact values and generating a report of said inventory impact values.