What parameters are assessed by a What If analysis in the Inventory Optimization Process?

In the context of Inventory Optimization, What If analysis is employed to assess the impact of various scenarios on service levels. When performing this analysis, the goal is to determine how changes in parameters like demand variability, inventory policies, lead times, or other influential factors can affect the ability to meet service levels.

Service levels represent the desired performance metrics associated with fulfilling customer orders on time and in full. Evaluating service levels through What If analysis enables businesses to anticipate potential stockouts or overages under different demand or supply conditions. By understanding how various changes could improve or degrade service levels, companies can better strategize their inventory management and ensure they align their supply with customer expectations.

Assessing other parameters, such as the number of planning combinations, changed variability, or capacity consumption, can be important in their own right, but they are not the primary focus of What If analysis in the context of optimizing inventory specifically aimed at maintaining or improving service levels. This nuance makes service levels the most relevant parameter in this particular analysis.