Complete New Production System via Excell!!

Kar Lung,

in such short time scales I would recommend against trying to forecast. I would look at historical demand and look at the variation in demand you get in a time period vs the leadtime for supply. Then calculate the buffer stock you would need to buffer against demand variation.

It all depends on how much variation in finished items there is, and what your replenishment time is (both your manufacturing lead time and your suppliers lead time).

For example, for a finished item, say you get demand between 10 and 20 per week, with a standard deviation of 3.4, your average is 15. (so make 15 per week) Assuming an even distribution over time, and a replenishment lead time of 2 weeks, then to buffer against the variation, allow 2 x standard deviation x lead time would need 2 x 2 x 3.4 = 13.6 so say 15 units. Sometimes your stock will be less than 15, sometime more, but you could then supply from stock!

You need to frequently review the demand so you don't run out or start growing too much inventory.

If your demand is for many different units, made from common components, then do the calculations for raw materials in the same way instead, and make to order.

Hope this helps? John Hardwick
FIOM