# Inventory Optimization

> Optimal stock levels and reorder points: less idle capital, without sacrificing service level.

Inventory is the decision that trades capital against service level, and it is almost always settled by a fixed rule. Orion calculates stock levels, reorder points and lot sizes from the real variability of demand and lead time, for each item, instead of applying the same policy to the entire catalog.

## Overview

- Area: Value Chain and Logistics
- Delivery: Orion Portal, Orion Supply (live)
- Solution 07 of 15
- Topics: Reorder point, Safety stock, Service level

## When this decision gets expensive

If two or more sound familiar, this solution will most likely pay for itself.

- The inventory policy is the same for items with very different demand patterns.
- Fast-moving items run out while capital sits idle in slow movers.
- Replenishment parameters were set years ago and never recalibrated.
- Purchasing reacts to stockouts instead of anticipating coverage.

## What Orion delivers

- Safety stock calculated per item, from demand and lead time variability.
- Reorder points and economic lot sizes reviewed at the pace of the operation.
- Classification of items by criticality and consumption pattern, with a dedicated policy for each class.
- An explicit trade-off between capital tied up and target service level.

## Technical foundation

- **Inventory models:** Continuous and periodic review policies calibrated to the agreed service level.
- **Estimated variability:** Demand and lead time treated as distributions, not as averages.
- **Integration with forecasting:** The demand projection feeds directly into the replenishment policy.

## Indicators tracked

- Inventory coverage in days
- Stockout rate by item class
- Capital tied up in inventory
- Turnover by product family

## Talk about this solution

WhatsApp: https://api.whatsapp.com/send/?app_absent=0&phone=5554991678345&text=&type=phone_number
E-mail: orion@orionotimizacao.com
Full method: https://orionotimizacao.com/en/method

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