Hybrid Indexing for Operationally-Aware Inventory Costing: Simulation and ERP-Based Validation
DOI:
https://doi.org/10.63282/3050-922X.IJERET-V7I2P132Keywords:
Adaptive Inventory Costing, Hybrid Indexing, ERP Integration, Operational Analytics, Cost TieringAbstract
Dynamic chain of supply with variable service levels and demand volatility must be supported by a mechanism for inventory costs that is adaptive and able to work with enterprise resource planning (ERP). This paper presents a framework for Adaptive Hybrid Indexing for Operationally-Aware Inventory Costing (AHI-OAIC) that combines operational signals, dynamic SKU tiering, and ERP costing structures to provide a responsive inventory costing without the need to move inventory. The framework encompasses simulation-based scenario modelling, weighted cost-to-serve scoring, buffer-driven volatility control and metadata-based cost group assignments that can be used with Oracle EBS R12.2 workflows. The results from experiments on 2,500 synthetic SKUs from promotional surges, carrier disruptions and operational sensitivity scenarios show enhanced cost visibility and profitability differentiation. Results show 61.6% stability in Tier convergence over 30 days, Oracle EBS convergence improvements of 91-97% in respect to flat baseline costing, and convergence on cost differentiation of 2.35× to 4.18× over flat baseline costing. The framework successfully maintained an even margin lift on all operational profiles while ensuring auditability, GAAP compliant cost rollups and ERP-native governance. Findings demonstrate that adaptive hybrid indexing enables scalable, operationally responsive, and financially transparent inventory costing in volatile supply chain environments.
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