SCM200

Demand & Inventory Planning

Forecast demand, measure forecast error, and choose an inventory policy. Four chapters connect safety stock, order quantities, service targets, and working capital through worked examples.

  • 4 chapters
  • ~21 min of reading
  • 12 learning objectives
  • 12 practice questions

Course overview

The course runs to 4 chapters and about 21 minutes of reading. Every chapter is self-contained: read it in one sitting, work the example on paper, then check yourself against the practice solutions before moving on.

The learning path below shows how the chapters build on one another, and each chapter card lists what you should be able to do once you have finished it.

How each chapter works

  1. Objectives — what you should be able to do afterwards.
  2. Reading — short sections that build the idea in plain language.
  3. Worked example — a full problem solved step by step.
  4. Practice — questions with solutions you can expand once you have tried them.
  5. Takeaway — the one sentence worth remembering.

Learning path

Chapters build on each other. This is the arc from first principles to the end of the course.

  1. Forecasting Basics and Forecast Error

    Pick a baseline forecast that matches the demand pattern, then measure its errors with both an absolute metric (MAD or MAPE) and a signed metric (bias) so you know whether you are noisy or off-center.

  2. Safety Stock and the Newsvendor

    Safety stock is a deliberate spend that converts demand and lead-time variability into a chosen service level, and the newsvendor is the right tool whenever you must commit to a single order under uncertainty.

  3. Lot Sizing and Replenishment Policies

    EOQ gives a defensible starting point for lot sizing, but the right policy on the shelf is the one that respects MOQ, freight, capacity, and review cadence while keeping the trade-off between ordering and holding visible.

  4. Multi-Echelon, Allocation, and Working Capital

    Inventory decisions are network decisions, and the right amount of inventory is the amount that hits the chosen service level at the chosen working capital cost, allocated across locations by a rule everyone understands.

Chapters (4)

Open any chapter to see its objectives, reading, worked example, and practice questions.

  1. Chapter 1: Forecasting Basics and Forecast Error

    • Choose a baseline forecasting method appropriate to demand pattern
    • Compute common error metrics (MAD, MSE, MAPE, bias) and explain what each one reveals
    • Separate random noise from systematic signal in a demand series

    3 sections · ~5 min read · 3 practice questions

  2. Chapter 2: Safety Stock and the Newsvendor

    • Compute safety stock from demand variability, lead time, and target service level
    • Use the newsvendor model to set a one-time order quantity under uncertainty
    • Explain how service level choice, lead time variability, and unit margin trade off against each other

    3 sections · ~6 min read · 3 practice questions

  3. Chapter 3: Lot Sizing and Replenishment Policies

    • Compute the Economic Order Quantity and explain its assumptions
    • Compare continuous review (s, Q) and periodic review (R, S) policies
    • Choose lot sizes that respect capacity, minimum order quantities, and freight constraints

    3 sections · ~5 min read · 3 practice questions

  4. Chapter 4: Multi-Echelon, Allocation, and Working Capital

    • Explain why a single-echelon view of inventory can mislead decisions in a multi-echelon network
    • Use a simple base-stock allocation rule across downstream locations
    • Translate inventory decisions into working capital and cash conversion cycle

    3 sections · ~5 min read · 3 practice questions