by Jon Schreibfeder | Feb 15, 2017 | Forecasting
Understanding the Elements of a Forecast A demand forecast is a prediction of the quantity of a specific product that will be sold or used in an upcoming time period (usually a month). The accuracy of your forecast is a determining factor in whether or not you will...
by Jon Schreibfeder | Jan 20, 2017 | Forecasting
Monitoring Your Forecast Accuracy Replenishment capabilities in most computer software packages answer two vital questions: When a stocked item needs to be reordered to avoid a stockout? How much of the product should be ordered? A critical factor in...
by Jon Schreibfeder | Dec 16, 2016 | Forecasting
Most organizations are continually buying new products. Unfortunately, part of the quantity of many of these items is “D.O.A.” or dead on arrival. That is, you do not sell the entire initial purchase quantity. For example, you might buy a case of 48 pieces of an...
by Jon Schreibfeder | Nov 15, 2016 | Stocking Decisions
It is amazing how many organizations are filled with reactive buyers. They spend their days going from crisis to crisis. Often these “emergencies” involve issuing or expediting a purchase order for a product that should have been on the shelf and available for...
by Jon Schreibfeder | Oct 15, 2016 | Stocking Decisions
How often does a salesperson tell you that a customer wants you to stock a certain product? They probably will dictate the number of pieces of the item that should be kept in inventory. You buy the product, place it on the shelf, and forget about it. Twelve months...
by Jon Schreibfeder | Aug 15, 2016 | Forecasting
Often the best sources of this information are your customers. Indeed, the term “collaborative forecast” refers to a cooperative effort between you and your customers to derive an accurate demand forecast. But, we have found that collaborative information from many...
by Jon Schreibfeder | Jul 15, 2016 | Forecasting, Stocking Decisions
Most computer systems forecast future demand of products based on past usage history. These systems assume that what you sold or used in the past is a good indication of what you will sell or use in the future. But this isn’t always true. For example: ...
by Jon Schreibfeder | Jun 17, 2016 | Purchasing
Often vendors offer a bigger discount or other considerations for placing a larger order. It is tempting to always increase the size of a replenishment order to “get the extra five percent discount” or “qualify for free freight”. Sure, buying at a lower unit cost...
by Jon Schreibfeder | May 15, 2016 | Order Cycles
Last month we discussed calculating the order cycle (also commonly known as the review cycle). That is, how often you should place replenishment orders with a vendor. Another way of defining it is how often you sell or use enough of a particular vendor’s products to...
by Jon Schreibfeder | Apr 15, 2016 | Forecasting, Stocking Decisions
This month we will begin to examine the last of the parameters used to determine when to reorder a product, the order cycle (also known as the review cycle). The order cycle is the normal time between issuing replenishment orders with a supplier that meet that...
