Inventory parameters reference
Inventory parameters are the configuration values provided per SKU so that the inventory simulator can compute optimal replenishment policies. They are distinct from output metrics (such as the calculated safety stock or ROP): parameters are inputs, results are outputs.
Parameter table
| Parameter | Description | Unit |
|---|---|---|
| Holding cost | Cost of keeping one unit in the warehouse for one period. Includes opportunity cost, storage, and obsolescence risk. | $/u·period |
| Shortage cost | Economic penalty per unit of unmet demand (stockout). Reflects lost sales, expediting costs, or customer relationship damage. | $/u |
| Lead time | Replenishment time: number of periods between placing an order and receiving it at the warehouse. Must be a positive integer ≥ 1. | periods (months) |
| On-hand inventory | Units physically available in the warehouse at the time the simulation is run. | u |
| In-transit inventory | Units already ordered from the supplier that are in transit and have not yet arrived. Added to on-hand inventory to compute Net Flow. | u |
| Unit price | Product cost price. Used to compute inventory value and certain financial KPIs. | $ |
| Forecast adjustment (%) | Percentage correction factor applied to the forecast before it is used in the simulation. A value of 5 increases projected demand by 5 %; a value of -10 decreases it by 10 %. | % |
How to edit
Parameters are edited directly in the Inventory module grid: click a cell, enter the value, and press Enter. Changes are saved automatically (auto-save).
Forecast adjustment application order
The Forecast adjustment (%) is applied before the statistical cascade. This means the correction factor affects:
- The demand mean (μ_W) that feeds the safety stock calculation.
- The simulated demand in each Monte Carlo scenario.
- The derived costs (expected holding and shortage).
Adjusting this parameter is equivalent to assuming the base forecast will systematically be higher or lower than what the model predicts.
Persistence
Parameters are stored in isolation per client (tenant). Each tenant has its own parameter set, isolated from all others.