Optimising inventory

This is the story of how a relatively simple rule of thumb for prestocking before a price increase evolved as part of a large change management project in a company which is referred to as ‘Eurokauf’. The starting point was a rule of thumb used for prestocking decisions which led to a two-dimensional prestocking tool. This necessitated an information system allowing management to weigh the effects of prestocking, inventory holding and service level and to convert them into a final total inventory cost. Optimising this cost led to a review of the logistic rebate system.