# Inventory Optimization

## What It Is

The Inventory Optimization skill gives your assignments a structured methodology for analyzing inventory health across a retail network and producing a prioritized action plan. It works through up to six analysis stages—scope and segmentation, stock health assessment, overstock detection, understock and stockout risk analysis, dead stock identification, and action planning—using whatever inventory data is available. If data for a particular stage is missing, the skill skips that stage gracefully and continues, so you always get meaningful output even from incomplete data.

This is a default skill—ready to use immediately without any setup.

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## What It Can Do

### Inventory Segmentation

* Classify SKUs using ABC/XYZ methodology based on revenue contribution and demand variability
* Analyze at the network level or per individual location
* Apply custom ABC thresholds when your category economics differ from standard defaults

### Stock Health Assessment

* Calculate days-of-supply (DOS) per SKU and location against category-specific targets
* Compute carrying cost impact using configurable carrying cost rates
* Flag SKUs where health metrics fall outside acceptable ranges

### Overstock Detection

* Identify SKUs with excess inventory and calculate the capital tied up
* Recommend corrective actions: inter-location transfers, supplier return windows, or markdown
* Prioritize overstock actions by estimated financial impact

### Understock and Stockout Risk

* Calculate safety stock requirements using demand variability and lead time data
* Identify SKUs approaching or below their safety stock threshold
* Estimate lost sales exposure from projected stockouts

### Dead Stock Identification

* Detect SKUs with zero or near-zero movement over a configurable period
* Flag items approaching lifecycle end, pending relaunch, or eligible for liquidation
* Recommend write-off, donation, or redeployment actions

### Prioritized Action Plan

* Consolidate findings from all stages into a single ranked action list
* Sort actions by estimated financial impact so buyers and planners know where to focus
* Produce output in Markdown table format or a format suitable for sharing with stakeholders

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## When to Use It

Use the Inventory Optimization skill when your assignment needs to:

* **Run periodic inventory reviews**: Analyze weekly or monthly stock health across categories and locations
* **Identify capital tied up in overstock**: Find which SKUs are consuming cash that could be redeployed
* **Reduce stockout risk**: Surface understocked items before they result in lost sales or empty shelves
* **Clear dead stock**: Systematically identify and recommend disposal options for non-moving inventory
* **Prepare buyer or planner briefs**: Generate structured reports ready to share with merchandising or supply chain teams

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## Example Tasks

* "Analyze my inventory data and identify which SKUs are overstocked across all stores"
* "Check stockout risk for chilled products given our current supplier lead times"
* "Find all dead stock items in the frozen category and recommend liquidation options"
* "Run a full inventory health review and give me a prioritized action plan sorted by financial impact"
* "Flag any dairy SKUs where days-of-supply exceeds 30 days"

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## How to Use

1. Open the assignment you want to configure
2. In the assignment settings, find the Skills section
3. Select the Inventory Optimization skill
4. In your assignment's SOP, describe the inventory data sources available (spreadsheet exports, SQL query results, or direct warehouse connections) and any category- or location-specific thresholds you want applied
5. Optionally connect a data warehouse (Snowflake, BigQuery, Databricks) or Google Sheets for direct data access

The skill asks clarifying questions about scope, categories, and thresholds upfront, then works through the analysis stages automatically.

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## Things to Know

* This is a default skill available to all teams
* Every analysis stage is optional—the skill adapts to whatever data is available and clearly reports which stages ran and which were skipped
* Days-of-supply thresholds and carrying cost rates can be adjusted to match your category economics
* The skill pauses at key decision points to confirm business rules (transfer policies, markdown authority, write-off thresholds) before recommending actions
* Pairs with the Auto-ordering skill to convert understocked SKUs directly into purchase order candidates
* Pairs with the Input Cost Monitor skill to factor commodity price movements into overstock risk assessments