Normally, I just delete spam comments and continue on with my day, but this one, although merely an attempt to put a link from inventory management was at least related to the subject at hand. So I thought, what the hell, I'll write an article about it.
The comment I'm referring to is in response to my most recent article and reads as follows:
The above formula applies only for the reorder point - order quantity system. The mathematical problem is to find the correct reorder point for a discrete time axis and often non-normal and dynamic demand. Many textbook formulas are wrong. See the new textbook [link deleted]
Although it's spam, it raises an interesting point; are the formulas on this page the most reliable?
In short, not always, but by and large, yes.
The comment aptly points out that there are, for certain inventory issues, better formulas than what is layed out on this site. One of my articles details the implementation of the more optimal models. The problem is that these models are often more trouble that they're worth.
In other words, it's not always worth it to spend one millions dollars in order to save half a million dollars.
What this site offers are inventory management tactics that should be a starting point. Ideas to think about and in many cases, very worthwhile formulas capable of acheiving serious savings for your firm.
In other cases, more robust formulas and algorythms can and possible should be applied. My honest advice if this advice applies to you is to hire a consultant if you do not already have the infrastructure to achieve better than average models.
And, if you're right on the edge of needing a consultant and doing well without one, my advice is to check out your industry competition and see how your inventory turns stack up to your rivals. If you're doing well, then good, if not, maybe it's time to improve. Look forward to more on checking out the competition.