The amount of inventory kept at each stock point in a warehouse network is usually based on?

TRADE OFF BETWEEN - TRANSPORT & WAREHOUSE

The answer is #  3. Tradeoffs between warehousing, inventory and transportation costs

sorry i'm not expert on this filed

demand for end-items>>>>>>>>>>>>>>>>>>>>>>>>

Hello Team,

Every distribution warehouse in supply chain network holds inventory and has some safety stock maintained. How much safety stock or inventory should be kept at each warehouse is the topic I am going to address in this blog. In fact my focus will be on one common mistake that is made in the process of setting inventory and safety stock norms.

Products stored in the warehouse are categorized using some logic and inventory / safety stock policies are based on this categorization. Multiplicity of factors are considered before arriving at product categorization. Some of the commonly considered factors are mentioned below.

1) Average Sales per month - Referred as Fast / Medium / Slow moving categorization

2) Business Importance / Profit Margin - Refered as A, B, C categorization

3) Product Life Cycle - New / Emerging / Mature / Phase Out product

4) Sales Pattern - Seasonal / Non Seasonal

Above list can be increased using lots of situational factors suitable for a particular business scenario but ultimate theme will always revolve around above factors. After product categorization is complete demand and supply uncertainty is assesed before arriving at inventory and safety stock norms. Some of the commonly occuring demand side uncertainty factors are as follows - Forecast Accuracy, Lumpy demand flow because of lot size and truckload considerations, uncertain time and quantum of seasonality etc. Some of the supply side uncertainty factors are as follows - Uncertain inbound logistics leading to lead time variations, breakdown in factory, unreliable suppliers and so on. To counter both demand and supply side uncertainty a safety stock or buffer inevntory is maintained at warehouse under consideration. How much safety stock inventory is maintained and for which category of product is called Inventory Policy.

Regards,

Saiyid

The amount of inventory kept in the warehouse based on many factors like :

1- The curve of demand

2- The lead time 

3- Carrying cost  & Ordering cost .

that the nearest answer as i think would be Tradeoffs between warehousing, inventory and transportation costs.

Well i would say that the constant demand for that determines the level of stock the company opts to place at a particular point in warehouse. 

I would categorize in a different way. 

1. Fast Moving Products.

2. Occasionally required products.

3. Seldom required products. 

According to my knowledge this answer would be : Tradeoffs between warehousing, inventory, and transportation costs

Tradeoffs between warehousing, inventory and transportation costs==========================

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