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Managing Inventories for Increased Profitability

A Required Session of the Supply Chain and Logistics Management Certificate Program

Who Should Attend
New as well as experienced inventory, purchasing, warehouse and traffic managers and supervisors and other administrators responsible for the material management function within their organization will benefit from this powerful and specialized program.

About This Program
How can Managing Inventories for Increased Profitability significantly improve the bottom line of a company and increase its competitive advantage? For many manufacturers, wholesalers and retailers, inventories represent the largest single investment in corporate assets. That’s why, especially in today’s sometimes uncertain marketplace, informed and efficient inventory management can help your company improve its cash flow and reap a greater return on its assets.  By attending this information-packed, two-day seminar, you’ll return to your job with the knowledge that you can positively influence your company’s bottom line by making sound inventory management decisions. This program will give you the “tools” and techniques you need to meet the challenges of inventory management.


  • Determine the impact that inventories have on corporate profit performance.
  • Improve forecasting accuracy and improve production or purchasing activities.
  • Recognize how inventory management contributes to “Least Total Cost” logistics operations.
  • Set safety stocks and measure service levels.
  • Calculate inventory carrying costs.
  • Understand how inventories and customer service levels are interrelated.
  • Recognize specific ways that profits can be improved by reducing inventories while simultaneously improving customer service.

The Program Outline

  1. Customer Service: Underlying Core Principles: The relationship between inventory and corporate profitability, customer service and least total cost logistics. The bridge between marketing and logistics: how logistics interfaces with and affects the other components of the marketing mix.
  2. Basic Inventory Strategies: The functions of inventory. Recognizing the relationship between customer service and inventory policies. Differentiating customers based on service level needs. The effect of lead-times and demand on inventories.
  3. Determining the Costs to Hold Inventories: Determining the cost of capital for inventory decisions. Inventory service costs. Storage space and risk costs. The relationship between inventory turns and inventory carrying costs and developing an inventory carrying cost per
  4. unit-item sold.
  5. Setting Customer Service Performance Standards: Putting a price tag on alternative inventory policies. Determining safety stocks and fill rates. Measuring customer service performance.
  6. Forecasting Independent Demand: Why forecast? Principles of forecasting. The forecasting process. The benefits of accurate forecasts. Measuring and responding to error. What makes a good forecast? Types of forecast.
  7. Managing Manufacturers’ Inventories: Converting a forecast into a production/purchasing plan. Extending logistics into the production schedule process.“Can do” ways to reduce manufacturers inventories and streamline/improve relationships with suppliers and customers.
  8. Using Contribution Analysis to Evaluate Products and Customers: Why use segment profitability reports to evaluate product performance? What costs should be included in measuring performance? Advantages of contribution analysis over other approaches. Implementing profitability reports using existing data files. NOTE: This concept will be illustrated by several examples of actual studies performed in varying industries. 
  9. Strategies to Reduce Inventories and Improve Profitability: How to use “ABC/80-20” analysis to identify weak, unprofitable products and reduce inventories. How to identify obsolete and excessive inventories. Identifying the underlying causes of high inventories and poor service levels.