Inventory models

The basis for each planning concept is an inventory model. Lanza has three inventory models: Fast, Slow, Non.

Fast

For fast movers, Lanza uses an (R,s,Q)-inventory model, calculating the reorder point (s) and order quantity (Q). Inventory is reviewed every (review) period (R). When the inventory drops below the reorder point, a replenishment is triggered to replenish the inventory with the order quantity (Q).

This model

  • is applicable for fast moving parts
  • assumes a normal distribution of demand
  • is the default model for the planning concepts: ‘Wholesale’, ‘Lean’, ‘Proactive’
Fast model inventory development

 

Slow

For slow movers, Lanza uses an (S-1,S)-model, calculating a base stock level. When inventory drops below the base stock level (S), a replenishment is triggered to replenish the inventory back to the base stock level.

This model

  • is applicable for slow moving parts
  • assumes a (compound) Poisson distribution of demand
  • is the default model for the planning concept: ‘Just in case’
Slow model inventory development

 

Non

For non-movers, Lanza uses no inventory model, as there is no demand. Here the required stock level is by definition zero, e.g. for non-movers or obsolete parts.

This model

  • is applicable for non-moving parts
  • is the default model for planning concept: ‘Non stock’