Determining order lead time for a supply chain using a probability distribution of order lead time

A system of optimizing inventory, comprising:

• a database configured to store one or more end node demand streams in a supply chain, each end node demand stream comprising a time series of demands at an end node in the supply chain forecasted over one or more time periods;
• a computer system coupled with the database and configured to:
• organize one or more order lead time groups that characterize an order lead time of each of the one or more end node demand streams;
• calculate an order lead time probability distribution for each order lead time group;
• retrieve a supply path in the supply chain for the end node of each end node demand stream;
• calculate a cumulative supply lead time for each inventory-carrying node upstream from the end node in the supply path of each end node demand stream;
• divide the order lead time probability distribution of each order lead time group into order lead time segments corresponding to each supply lead time, each order lead time segment representing a portion of the supply chain that allows for distribution of order lead times and demand upstream in the supply chain;
• redistribute demand to at least one of the order lead time segments upstream in the supply chain for each of the one or more end node demand streams;
• and
• calculate inventory targets at each inventory-carrying node in the supply chain.

A non-transitory computer-readable medium embodied with software for optimizing inventory, the software when executed using a computer is configured to:

• generate one or more end node demand streams in a supply chain, each end node demand stream comprising a time series of demands at an end node in the supply chain forecasted over one or more time periods;
• organize one or more order lead time groups that characterize an order lead time of each of the one or more end node demand streams;
• calculate an order lead time probability distribution for each order lead time group;
• retrieve a supply path in the supply chain for the end node of each end node demand stream;
• calculate a cumulative supply lead time for each inventory-carrying node upstream from the end node in the supply path of each end node demand stream;
• divide the order lead time probability distribution of each order lead time group into order lead time segments corresponding to each supply lead time, each order lead time segment representing a portion of the supply chain that allows for distribution of order lead times and demand upstream in the supply chain;
• redistribute demand to at least one of the order lead time segments upstream in the supply chain for each of the one or more end node demand streams;
• and
• calculate inventory targets at each inventory-carrying node in the supply chain.