Articles on: Inventory Replenishment

Inventory Forecast - stock movement based


This report provides the comprehensive examination of inventory dynamics, emphasizing the crucial aspect of stock movement. Leveraging historical sales and stock data, this analysis aims to provide insights into future inventory needs, optimize stocking strategies, and enhance overall inventory management efficiency.
In this report, we predict inventory demand by analyzing stock movements, considering the number of units deducted due to various factors such as sales, inventory transfers, shrinkage, and staff adjustments. This allows us to estimate the additional inventory required to counterbalance stock reductions, ensuring that sufficient products are available in the store

Key Terms

SKU: Stock Keeping Unit, a unique identifier for your product variants.
Beginning Quantity: The initial quantity of a product in the inventory at the commencement of a specified historical period.
Total Units Deducted: The cumulative quantity of units subtracted or decreased for a specific product variant over a historical period.
Total Units Added: The cumulative quantity of units received or added to inventory for a specific product variant over a historical period.
Ending Quantity: The concluding quantity of a specific product variant in the inventory at the end of a historical period.
Avg Units Deducted per Day: The mean quantity of units deducted or sold daily for a specific product variant over a historical period.
Quantity On-hand: Current stock levels of each product.
Incoming Inventory: Ordered stock that is yet to be received.
Days of Inventory Remaining: Estimated time until the current stock runs out.
Forcast Time: The duration, measured in days, over which inventory requirements are projected and forecasted.
Forcast Inventory Quantity: The projected number of units required to sustain adequate stock levels for a given product

Formulas for Forcast Inventory Quantity

[Forcast Inventory Quantity] = [Avg Units Deducted per Day] * [Forecast Time] - ( [Quantity On-hand] + [Incoming Inventory] )

Using the Report

Monitor Stock Levels: Check the 'Quantity On-hand' and 'Days of Inventory Remaining' to understand current stock status.
Plan Purchases: Use the 'Forecast inventory quantity' to plan your inventory purchases both in terms of quantity and budget.
Evaluate Sales Performance: 'Total Units Deducted' and 'Avg Units Deducted per Day' provide insights into the sales performance of each product variant.
Manage Supplier Relations: 'Vendor Lead Time' helps in planning orders considering the time it takes for products to be delivered.

Tips for Effective Management

Regularly review the report to stay ahead of inventory needs.
Coordinate with suppliers for products with high sales velocity or long lead times.
Use the data to negotiate better terms with suppliers, like reduced lead times or bulk purchase discounts.


This report is a powerful tool for maintaining optimal inventory levels, avoiding overstocking or stockouts, and ensuring customer satisfaction through product availability.

Updated on: 28/12/2023

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