Inventory Management KPIs
This workflow computes inventory management KPIs. It categorizes the inventory based on the ABC model on the basis of the contribution value of items, and calculates the following KPIs: Safety stock, Reorder Point, and Economic Order Quantity (EOQ).
The workflow first calculates Lead time from the date difference between the order date and the order fulfillment date. Next, it computes the total value of each order by multiplying the unit cost against the consumption quantity. Lastly, the workflow calculates the Safety stock on the basis of a service level specified by the user in the "Probability Point Function" component. The safety stock values are then used to calculate the Reorder Point and then the Economic Order Quantity.
The inventory categorization based on the ABC model follows these rules:
Category A - Items contributing to 80% of the total value
Category B - Items contributing to the next 15% of total value
Category C - Items contributing to the last 5% of total value