Forecasting and Inventory Management
A joint venture with Smeal College of Business' Center for Supply Chain Research. Cosponsored by the Council of Supply Chain Management Professionals.
This course will provide participants with practical techniques to generate more accurate forecasts and desired inventory levels as well as to monitor and improve forecasting and inventory management performance over time. We will discuss what sources of information can be used to improve forecast and inventory management performance. In addition, we will investigate the critical financial impacts that overinflated inventory levels may cause.
Who Should Attend
This introductory program is for managers or analysts who are new to supply chain processes and particularly those new to working in demand management (forecasting and inventory management) or who want to improve their knowledge in this area. Those who work as functional counterparts in finance, information systems, manufacturing, or marketing will also benefit.This program is among the options for those pursuing a Professional Certificate in Supply Chain Operations.
At the end of this course, you will be able to:
- Calculate and use measures of forecast accuracy and bias
- Forecast future sales using past sales data (time series models)
- Explain the importance of inventory management to the firm, with a focus on financial impacts including inventory carrying cost calculation and application
- Understand how inventory can be reduced while maintaining or even raising customer service levels
- Identify opportunities to reduce inventory or make it more productive
- Determine how inventory objectives that differ among products having different demand patterns (e.g. stable, seasonal, short life cycle) can be managed differently
Value Created for You and Your Company
In most business contexts, forecasts are needed to support resource allocation decisions. More accurate forecasts lead to better resource allocation and thus improved financial performance, particularly by reducing the amount of inventory that must be carried. The direct relationship that exists between forecasting and inventory management is why this course will address both key supply chain concepts together. Inventory management may be the most important “lever” in the supply chain in its overall effect on corporate profitability. This course is designed to strengthen understanding of the foundational concepts in forecasting and inventory management and to provide participants with the contextual knowledge of how to use these concepts to drive improvements.
Purpose and importance of forecasting and inventory management
- Understanding the resource decisions supported by the forecasting process
- How the forecasting process fits in the sales and operations planning process of the business
- Forecasting techniques
- Time series and causal models
- Ensuring the right time lag and level of aggregation
- Incorporating expert judgment and market intelligence
Measuring and improving forecast performance
- Measuring forecast accuracy
- Measuring forecast bias
Relationship between forecasting and inventory
Importance of inventory management
- Financial impact of inventory
- Inventory metrics to support and measure inventory performance
- Inventory turns
- Days of supply
- Return on Assets and Return on Investment
- Calculating inventory carrying cost
- Using inventory costs to make decisions
Determining appropriate inventory levels to ensure in stock levels while minimizing obsolescence
- How to set levels
- Discussion of how to determine best parameters (inputs) for product inventory levels
Evaluating software used to enable forecasting and inventory management
Our programs are taught by world-class faculty leaders from Penn State, as well as supply chain professionals. Each instructor has an extensive background in research and consulting, and in educating executives. Each brings to the classroom best-practice tools and implementation processes for achieving world-class results.
Dr. Christopher D. Norek, Senior Partner, Chain Connectors, Inc.and Senior Instructor, Penn State
Download: Read about effective implementation practices of an S&OP program in a brief article written by Dr. Norek featured in Logistics Quarterly.
Dr. Doug Thomas, Professor of Supply Chain and Information Systems, MBA Faculty Director
The program fee of $2,500 includes all instructional materials, private room accommodations, meals, break service, and access to recreational facilities. Association member pricing applies:
$2,400 for CSCMP members
$2,150 for CSCR corporate sponsors
Active military personnel, PSU alumni, and teams of three or more attending this program from one company are eligible for a 20% program discount.
Our enrollment coordinator will be happy to hold a seat for you in this program. A reservation does not commit you to the program until you submit the registration form online. Please call 814-865-3435.
This program is among the options for those pursuing a Professional Certificate in Supply Chain Operations. Participants must take two others from the topics below to complete the Certificate:
- Fulfillment Operations Management provides an understanding of fulfillment operations from forecasting thru delivery.
- Introduction to Supply Chain Analytics a better understanding of the extent to which objectives are being achieved.
- Strategic Procurement and Purchasing develops knowledge of basic principles in purchasing and the drivers that create competitiveness.
- Transportation Operations and Sourcing covers methods to effectively manage transportation operations, source carriers and third party providers to reduce costs and improve service levels.
Programs may be taken in any order over any period of time. An Executive Programs representative will be happy to help you select the appropriate program for your current level of responsibility.
This program is cosponsored by the Council of Supply Chain Management Professionals.