System and Method of Simultaneous Computation of Optimal Order Point and Optimal Order Quantity

A system, comprising:

• a multi-echelon supply chain network comprising two or more entities, the two or more entities comprising at least a first entity that produces an item and at least a final entity comprising a customer demand;
• one or more computers comprising one or more memory units and one or more processing units, collectively configured to:
• receive initial inputs over a computer network, the initial inputs comprising a target performance of the multi-echelon supply chain network and the two or more entities, each of the two or more entities comprising a reorder point (R) and an ordering quantity (Q);
• compute a baseline inventory performance;
• compare the baseline inventory performance to the target performance;
• compute a reorder point derivative and an ordering quantity derivative for each of the two or more entities;
• sort the one or more reorder point and ordering quantity derivatives;
• select a best derivative (D′) based on maximizing improvement in inventory performance while minimizing increase in cost;
• constantly monitor the D′ to determine whether the D′ is the reorder point derivative or the ordering quantity derivative;
• automatically change the reorder point (R) of the entity corresponding to the best derivative to the R plus a reorder point increment (Inc R) when the D′ is the reorder point derivative;
• automatically change the ordering quantity (Q) of the entity corresponding to the best derivative to the Q plus an ordering quantity increment (Inc Q) when the D′ is the ordering quantity derivative;
• compute a new inventory performance;
• and
• compare the new inventory performance to the target performance;
• and
• at least one of the two or more entities, adjusts the ordering quantity (Q) at least partially based on the new inventory performance such that the size of the order is based on the adjusted ordering quantity (Q) of the item when the reorder point (R) is reached to reduce a customer wait time for the item based on the target performance associated with the final entity in the multi-echelon supply chain network.