Replenishment is the stock required to meet inventory forecasts based on inventory goals, supply and demand. Factors include replenishment data such as timing, availability and delivery speed - also known as lead time. With inventory forecasting, you calculate the amount of the different types of inventory necessary for future periods. Reorder points are one important piece, but there is much more to inventory forecasting. Forecasting is more than just setting a reorder point - it’s using data analysis to identify patterns and trends to adapt to dynamic conditions and meet customer demand. Accurate forecasting ensures businesses have enough product to fulfill customer orders while not tying up cash in unnecessary inventory. Inventory forecasting - also known as demand planning - is the practice of using past data, trends and known upcoming events to predict needed inventory levels for a future period. On a strategic level, forecasters need insights into organizational goals, local and global supply chain challenges, planned marketing pushes and campaigns, potential media influences and the competitive landscape. Essential data elements required for accurate inventory forecasting include the following: Some factors could have a significant impact on revenue, while some have only a mild effect. Market forces can change quickly, and something as seemingly insignificant as a product placement by a Tik-Tok influencer could clear out your stock in seconds.įactors can be major or peripheral. Getting forecasts right requires a mix of data analysis, experience in the industry and customer insights to metaphorically peer into the crystal ball and predict future demand. East, Nordics and Other Regions (opens in new tab)Īn accurate inventory forecast is invaluable, especially in times when supply chains and consumer demand are changing rapidly.
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