The Smart Forecaster
Pursuing best practices in demand planning, forecasting and inventory optimization
We are often asked what the difference is between these two important performance metrics for inventory planning. While they are both important for measuring how successful a business is in meeting demand, their meaning is very different. If not understood and incorporated into the strategic inventory planning process, inventory will be inefficiently allocated resulting in lower customer service and higher carrying costs. We’ve illustrated the difference in this 4 minute recording using Microsoft Excel.
Smart Operational Analytics automatically calculates historical service levels & fill rates across any item. To see how you calculate these and other operational metrics including inventory turns, supplier performance, and more register below to watch a five minute demonstration. The demo will show how our cloud platform continuously calculates and reports these metrics across thousands of items helping you identify opportunities for service level improvement and inventory reduction.
Safety stock is a critical component in any system of inventory management. Indeed, some inventory software treats safety stock as the key decision variable in the quest to balance inventory cost against item availability. Unfortunately, that approach is not the best way to strike the balance.
The New Forecasting Technology derives from Probabilistic Forecasting, a statistical method that accurately forecasts both average product demand per period and customer service level inventory requirements.
When setting a target service level, make sure to take into account factors like current service levels, replenishment lead times, cost constraints, the pain inflicted by shortages on you and your customers, and your competitive position.