target production = sales + inventory correction
Units: Frame/Month
inventory correction = (target inventory - Inventory)/
TIME TO CORRECT INVENTORY
Units: Frame/Month
TIME TO CORRECT INVENTORY = 2
Units: Month
target inventory = sales * INVENTORY COVERAGE
Units: Frame
INVENTORY COVERAGE = 3
Units: Month
inventory correction is a stock adjustment formulation, just as net hire rate was. The time to correct inventory represents the time required to notice significant changes in inventory and schedule corrections in production.
The important difference between this formulation and that of net hire rate is that the net hire rate directly influences the stock it is attempting to adjust (Workforce) whereas inventory correction influences target production, net hire rate, Workforce, production and finally inventory. This connection has an intervening level, Workforce, which has important dynamic consequences.
