THEORY OF INVENTORY MANAGEMENT BASED ON DEMAND FORECASTING

Efficient management of supply chains consists in particular in ensuring possibly highest quality of customer service and striving for minimization of the costs generated by flow between the links. Typical cause of constantly increasing costs is excessive inventory levels throughout the chain. The reason for this situation is maladjustment of the level of supply to the level of demand in the market, which results in surplus stock. The starting point for reduction in inventory levels is forecasting of demand in the market through market prognoses in cooperation with all the links in the supply chain. Therefore, in the aspect of demand forecasting, the character of data flow and the type of cooperation between the links is essential.