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Smarter Inventory Management with Advanata

1–2 minutes

Inventory management is a well-studied application, but Advanata takes a uniquely customer-focused approach rather than a traditional operations-research one. This allows customers to easily configure and solve their inventory challenges in a way that aligns directly with how their business actually works.

Inventory Management Problem

A garage has to manage its parts inventory. They are not big enough to justify an operations research team, but they are busy enough that inventory management matters. They want short customer lead times, reasonable inventory levels, and strong profitability.

Garage carries car parts for fixing their customer's cars. They want to keep enough inventory on hand so customers don't have to wait, but not so much that it hurts profits. Data available is for different car parts, combinations of purchase, sales, and profit margins.

Inventory Management Preparation

Vague customer goals can be easily turned into precise parameters that can be entered into Advanata.

"I want to keep enough inventory on hand so customers don't have to wait, but not so much that it hurts my profits" is a subjective statement by the customer. The target goal is lead time (days), options to reach each goal is the availability of different spare parts and the overall constraint that prevents from selecting all options is inventory value ($). The business problem in fact is "What is the optimal inventory level to minimize lead times and maximize profits"

The customer should stay focused on their goals rather than the details of how those goals will be achieved.

Instead of the customer focusing on supporting research problems they should focus on the main business problem instead.

Inventory Management Process

This problem is easy to configure and requires little customer effort. The analyst will handle rate estimation, and alternative sources for rates can be used as needed.

Customer wants to carry only $10k of inventory, maximize profit and minimize customer lead times. This problem structure is entered into Advanata and the analyst can help estimate problem parameters. Advanata then outputs the exact quantities of each car part that should be carried in order to achieve the customer's goals.

The real strength of Advanata is how easily customers can enhance their inventory management problem by adding new goals or structure without worrying about how the problem will be solved.

Customers can add new goals easily, independent of data availability or calculation methods. They can also add hierarchical structure to improve problem representation and address data gaps.

Similar Problems

This approach can solve a surprising range of problems, reflecting the depth of research in inventory management and its influence on business operations across all sectors.

A restaurant can manage their food stock to best serve customers and reduce wastage. An investment portfolio can be allocated to maximize profitability and minimize risk. Workload balancing can be done to maximize customer satisfaction with available resources. Advanata provides precision, ease of use, allows for multiple goals, and structure compared to conventional inventory management systems.

Solving Unique Problems

This is one of the simplest uses of Advanata, yet it applies to a wide range of problems. Most real-world challenges come down to allocating resources to the right actions to achieve the best outcomes, which mirrors the structure of an inventory management problem. With its customer-driven architecture, Advanata allows businesses to apply these methods to improve their operations easily and effectively.

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