Optimization Practice

When analytic problems in business have mathematically optimal solutions, we can bring to bear the increasingly sophisticated tools of linear regression, non-linear regression, and the like. Supply chain logistics present the classic problems in this field. In response, Friedrich, Klatt and Associates has built software and has performed sophisticated one-off analyses that create solutions to optimization problems that are perpetually reformulated.

Our most sophisticated application of these management sciences is in our Inventory Optimization Tool (IOT), developed in partnership with Mercer Management Consulting. This robust multi-user database server-based tool allows customers to model complete supply chain product lines, including all stock locations, demand processes, and supply processes, and then uses up-to-date data about the reliability of the supply processes, the accuracy of demand forecasts, and the like to generate target stock levels for each stock location. Its integrated simulator (see our Simulation Practice) allows users to simulate the use of these targets under varying conditions, and view the results in many user-defined time series charts. It also includes a complete sensitivity analysis chart pack in Excel sheets that can be distributed to plants or other locations. Contact us for information on licensing or customizing this tool.