Predicting how much inventory your business will need for upcoming sales cycles is tough. There are lots of moving parts and unknown factors that can affect inventory levels.
This doc helps you quantify that process and more accurately forecast inventory based on estimated demand. You start with past sales data and inventory on hand, and then forecast sales and inventory needs using a sensitivity analysis. This analysis lets you look at the future from worst, baseline, and best case scenarios, and also identify products that may be over or under stocked. You can then determine reorder points for each product based on lead times that you set.
The doc is split into 5 different parts:
, we can see trends in sales by type of product.
store the sales data by size and we can filter the chart by product type.
is the key part of the inventory planning system, in this section we choose the sales forecast data for the purchasing list calculation. There are three different scenarios where you can change the forecast data for better visualization. However, you need to choose just one scenario that will be used in the calculation by picking the "Scenario Chosen".
We keep track of our sales in
. We are tracking the quantity of products sold by
type of product
We track the
, to be used in the formulas later.
stores the inventory data and the chart of
Days of Inventory
is the inventory that is currently in transit (
. We just need to set the Avg Lead Time and Maximum Lead Time.
provides the quantity of products that we should buy, split by sizes, to fulfill the demand set in the
is the estimate dollar amount that would be spent in each month to fulfill the Purchasing List
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