Building an inventory optimization model in Excel
This video shows how to build a simple model of production and demand, and use it to optimize your production to meet all the expected demand while holding as little inventory as possible.
This is based on (part of) a question I wrote for the last round of the Financial Modeling World Cup. This video covers the main model setup and some ways to answer to the 'monster' optimization question. I'll have another one out in a couple of days to go over the rest of the question, which dealt with the unit costs and inventory valuation (FIFO vs LIFO).
If you want to give it a go, you can buy the case on the FMWC site here:
https://www.fmworldcup.com/product/st...
00:00 Introduction
01:11 Assumptions
04:45 Model setup
18:14 Optimizing inventory