Variance Analysis is the process of comparing actual inventory or supply chain performance against planned or forecasted outcomes. It helps identify discrepancies in key metrics such as demand, lead times, or costs, providing insights into the causes of overstocking, stockouts, or budget overruns.By conducting regular variance analysis, supply chain managers can adjust forecasting models, inventory policies, and operational strategies to improve accuracy and efficiency. This continuous feedback loop is critical for optimizing inventory levels and ensuring alignment with business goals.
