Planning what you need.
WHAT TO FORECAST
Units expected to sell, by period, by item.
WHAT TO BASE IT ON
Sales history for the same period last year Recent velocity Known changes
WHAT TO ADJUST FOR
Seasonality Promotions planned Items discontinued or added Lead times
THE LEAD TIME POINT
Forecast far enough ahead to order in time.
For imported goods, considerably further.
WHAT TO CALCULATE
When each item runs out at current rate When to reorder, given the lead time
WHAT TO BUILD IN
A buffer, for variability and delay.
WHAT TO AVOID
Ordering on optimism Ordering on a single good month
WHAT TO REVIEW
Forecast against actual, per item.
WHAT THAT REVEALS
Items consistently over-forecast, which tie up money Items consistently under-forecast, which lose sales
WHAT TO ADJUST
Your forecasting, based on that.
