The Science of Optimal Inventory

A key consideration to inventory optimization is to have a strategic view of how to allocate your inventory dollars among different types of inventory.        

You can do a bottom-up analysis to understand what you need at the SKU Location level and come up with the total investment. However this may not fit the budget.

What is the science behind optimal inventory setting - this is a dynamic problem that may even question the structure of your supply chain across different manufacturing facilities, stocking locations and the service levels offered to your customers. And you have to consider various costs in making this decision.

What is your approach to Inventory Target setting - share your thoughts?