Run Inventory Optimization

Inventory optimization allocates a company working-capital budget across SKUs to hit service-level floors and ceilings — without rewriting base Replenishment settings.

Set targets and budget

1. Open Supply Chain Planning → Optimization.
2. Set the company working-capital budget for safety-stock investment.
3. Set item or product-group service-level targets (ceilings) as needed.
4. Understand criticality floors — high-criticality items get a minimum service level even when budget is tight. Defaults tie into ABC/XYZ-style criticality; items without classification behave as standard. See Plan replenishment.

Run allocation and simulate

1. Run the allocation to distribute budget across SKUs.
2. Use Simulate turns to explore “what if we raise service level on this set?”
3. Review the allocation result before changing live targets broadly.

The engine uses a closed-form greedy allocation — it maximizes aggregate service level under the budget without an external solver.

Relationship to base Replenishment

Base Replenishment’s company-wide safety-stock and reorder-point settings remain. Supply Chain optimization is a parallel advisory engine. Do not expect the Optimization screen to rewrite Replenishment Settings.

Items covered by an active network (MEIO) or DDMRP decoupling point are handled on those paths instead — see Optimize warehouse networks and Use DDMRP buffers.

Next step

Review purchase suggestions

Action optimization output into real purchase requisitions.

Compare and promote scenarios

Clone parameters and what-if before changing live targets.