An approach to link customer characteristics to inventory decision making

Differentiation of logistics services through distinct inventory policies is analyzed. A framework is presented in which product-based information is supplemented by customer-specific characteristics when deciding on the inventory policy for a specific product. Product-based information includes sales volume and variation by product. Customer information consists of purchase volume and its growth potential, and evaluation of the effects that service level has on purchases. Delivery time is used as service measure and inventory policy consists of selecting the production mode from make-to-order, make-to-stock, or one of their variations. As a result, distinct inventory policies are formed.