Measures how effectively inventory is allocated across multiple locations or production lines to meet demand.
What it Measures ?
Inventory placed in the right regions to meet demand.
Relevant StakeHolders
Supply Planner, Inventory Manager
Why it Matters ?
Improves inventory optimization for demand fulfillment.
In-depth Use Case / Real-world Example
A company manufacturing industrial valves calculates Strategic Inventory Allocation by assessing how inventory is distributed across its warehouses or production sites to ensure demand is met without overstocking. For example, if 80% of the inventory is optimally distributed to meet customer needs, the company achieves a high level of inventory allocation efficiency.
Sample Formula
Strategic Inventory in Demand Regions / Total Inventory