Inventory Optimization and Scenario Simulation (El Niño)

This workflow forecasts product demand and estimates baseline inventory performance. Next, it simulates disruptive scenarios by applying El Niño-related adjustments to price, cost, and lead time. It then compares the resulting projections with the baseline to show potential changes in stock levels, coverage, and profit.

• Forecast demand and establish a baseline for inventory performance
• Test how changes to price, cost, and lead time affect projected stock
• Apply product-level exposure multipliers and assumptions to represent El Niño impacts
• Compare baseline and scenario outcomes, including profit and stock duration

1. Establish Baseline Demand and Inventory:
   The workflow uses historical demand patterns to generate forecasts and combines them with current inventory and product information. This creates a baseline for assessing stock, coverage, and estimated profit over time.

2. Apply El Niño Scenario Assumptions:
   Adjust price, cost, and lead time to model possible business changes, alongside product-level exposure assumptions and multipliers, price elasticity and forward-buying factors. These inputs produce a scenario forecast that can be compared with the baseline.

3. Project Stock and Replenishment Needs:
   The workflow estimates how inventory may change over time as forecast demand consumes available stock. It also applies restocking rules to help identify potential replenishment needs and inventory imbalances.

4. Visualize and Compare Outcomes:
   Compare baseline and scenario results to highlight changes in net profit, stock duration, and projected stock levels.