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I need to smooth out my production curve over time while still respectiing inventory limit

  1. #1
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    I need to smooth out my production curve over time while still respectiing inventory limit

    I'm trying to smooth out production to level out extreme values and I'm having a hard time coming up with the right logic. With Min, Max, ROQty, BegInv, and Sales all constant, I can develop the required production to a) meet demand + minimum and 2) not go skying off into the stratosphere (logic in cell C6 of the attached example.)

    What I can't do, apparently, is average these production requirements over a rolling series of periods (say, this period and the next two) in such a way that I don't violate min/max constraints, don't lose control of inventory (either going negative or growing beyond control), and don't have huge swings in production from period to period.

    Any thoughts on how to level production over time without increasing overall inventory levels? As it is, my model is demanding high levels for a given month, followed by multiple months of zero or very low production, and that's no way to live.

    Thanks,
    Alan
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  2. #2
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    Re: I need to smooth out my production curve over time while still respectiing inventory l

    It seems like you need a pro forma 'shipping schedule' from the 'Sales Department'. With future sales information, you can balance the costs of excess inventory versus 'out of stock' and have a meaningful production schedule.

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