Inventory

The inventory layer

How a forecast becomes a cost: through one shared order-up-to policy, with lost sales as the primary demand-shortfall model.

Inventory simulation

From forecast to cost — through one shared policy.

Every forecast feeds the same periodic-review order-up-to policy, so models are compared fairly on operational outcomes. Lost sales is the primary demand-shortfall model.

Forecast→ Order-up-to policy→ Inventory position→ Demand→ Fulfilled / Lost sales→ Holding + Stockout cost

Interactive conceptual demonstration

Order-up-to level—
Safety stock—
Est. holding (per cycle)—
At-risk units—
Peak stock—

Conceptual only. This uses a simple illustrative service-stock heuristic to show how order-up-to, safety stock, holding and at-risk units respond to your inputs. It is not a research result and does not reproduce the experimental pipeline.

Why this matters

A lower-error forecast is not automatically a lower-cost forecast.

Over-forecasting holds extra stock (holding cost); under-forecasting loses sales (stockout cost). Which matters more depends on the economics of the product. Because every forecast feeds the same policy, models are compared fairly — and the experiment can ask which method minimizes total cost under which economic conditions.

Cycle service level (CSL) and fill rate are reported separately, because a model’s ranking can flip depending on which service measure is used.