What is Inventory optimization?
Inventory optimization determines the economically best stock level per SKU to improve service level and cash flow at the same time. More stock is not automatically safer. Optimization accounts for demand variability, lead times, margins, minimum quantities, and stockout cost.
Practical example
Slow-moving variants are reduced while a volatile bestseller receives more safety stock.
What teams should remember
- Inventory optimization determines the economically best stock level per SKU to improve service level and cash flow at the same time.
- More stock is not automatically safer. Optimization accounts for demand variability, lead times, margins, minimum quantities, and stockout cost.