Anticipated Stock Planning

The demand of product is always fluctuating. Some demands fluctuate depending on the season, like air conditioner or heater, some do depending on the period of time, e.g. the demand of bicycle or desk for kids increases around the time of entrance ceremony. But considering the production capacity, it is very difficult for the production to flexibly respond to such large fluctuations in demand. Thus it is favorable to equalize and stabilize the production by moving the scheduled quantity of items for the high-demand period to that for the low-demand period, producing, and storing as an inventory. Such a planning is called Anticipated Stock Planning. In this case, since the items produced in advance are stored as an inventory, the production amount should be set considering the balance between inventory cost and the cost for enhancing the capacity.


Related term: Make to Stock Plan (in a broad sense)