Developing a Warehouse and Inventory Level Optimization System

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How much warehouse space will your company need throughout the year? That’s a brutally complex question--and companies that get it wrong can waste huge amounts of money. In Developing a Warehouse and Inventory Level Optimization System, Frank A. Tillman and Deandra Cassone introduce a complete model for answering this question more accurately and minimizing warehousing costs without introducing excessive costs elsewhere. Tillman and Cassone help you accurately project how much inventory you’ll need to house to avoid stockouts, by accurately analyzing the demand pattern of each product at the wholesaler level throughout the year and establishing the demand distributions and inventory requirements to cover service for each level of product at each wholesaler. Their sequential analysis establishes the safety stock and inventory levels required to support the desired service level to each wholesaler. Products are next measured as they flow through manufacturing, packaging, warehousing, and distribution to dynamically determine the optimal Full Goods Days Inventory as an output of the system. Tillman and Cassone’s sophisticated simulation approach goes beyond conventional linear programming allocation of resources, helping decision-makers project inventory build-up on a shift-by-shift basis. Their model can help companies prioritize products and allocate resources to maximize profit and customer satisfaction within existing demand and capacity constraints and makes possible detailed scheduling of products through the system.


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About the author (2012)

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Frank A. Tillman's varied and full career has encompassed 30+ years of teaching and research; he served as Department Head of Industrial Engineering at Kansas State University for more than 20 years and has published three books as well as 50+ professional articles. Tillman has also launched and led two consulting firms--IBES, Inc., and HTX International, Inc.--and developed both commercial and residential real estate.

Deandra T. Cassone currently teaches as an Adjunct Professor at Missouri University of Science and Technology in its graduate systems engineering program and is in management at a Fortune 100 company. She has spent more than 25 years in the industry, serving in consulting, technical, and management roles. Her interests lie in building structured decision-making models that encompass the application of the concepts in this digital short. She has also submitted and been awarded a number of business process patents.

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