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Learn · Supply chain

Inventory and forecasting

Seven lessons on how much stock to keep and when to order it: kinds of stock and what it costs, inventory turns, the economic order quantity, reorder points and safety stock, ABC analysis, forecasting and forecast error, and bills of materials and MRP. Practice until the sums are quick.

  1. Why inventory exists

    Raw materials, work in progress and finished goods, and the jobs stock does: cycle, safety and pipeline stock.

    6 questions

  2. What stock costs

    Holding cost, ordering cost and stockouts, and measuring stock with inventory turns and days of supply.

    6 questions

  3. How much to order: EOQ

    The economic order quantity: the order size that balances ordering costs against holding costs.

    6 questions

  4. When to order: safety stock

    Reorder points, lead-time demand, safety stock and service levels.

    6 questions

  5. ABC analysis and counting

    Sorting items by their value, managing each class differently, and keeping the records right with cycle counts.

    6 questions

  6. Forecasting demand

    Moving averages, exponential smoothing and measuring forecast error with MAD, MAPE and bias.

    6 questions

  7. Bills of materials and MRP

    Turning a production plan into parts to buy: bills of materials, gross and net requirements, and S&OP.

    6 questions
More info

How it works

Each lesson is a short read with examples, then a few practice questions. Some ask you to type an answer (a number, an address, what a piece of code prints), some have you pick one, and some have you tap steps or lines into the right order. You can try again as often as you like; after two misses there’s a button to show the answer.

What do I need to know first?

How supply chains work helps, and a calculator for the practice questions. The formulas are explained as they come up.

The other supply chain courses

Where is my progress saved? In this browser, like the rest of the site. Nothing to sign up for.