Allocation 101

Please see below an overview for the allocation module

Updated over a week ago


Allocation module ensures that you have the right amount of inventory in each of your locations (i.e. points of sale) to cover the forecasted demand on each location.

The output of allocation are transfer orders from warehouses (sources) to sales locations (destinations). The allocation workflow uses inventory on hand by location, inventory at the warehouse and sales forecasts by location to determine how much inventory should be transferred from source locations to destinations.

Note: Please note that Allocation is a separate module on Toolio. So, make sure that Allocation is enabled on your Toolio account, and let your customer success manager know if you would like this module to be turned on.

Key Concepts in Allocations

Allocate demand, not inventory

The concept of allocating demand may be foreign to a lot of retailers, traditionally allocation is about sending out a bunch of stock and then filling back in when it hits a min level. Allocation of demand is the process of estimating expected demand at a location/sku level and allowing the optimization engine to pull the ideal quantity of stock to the locations, as it is needed. There are a number of key advantages of this approach.

Pull vs push approach

When allocating demand to locations, the optimization engine is able to pull inventory as it is needed, this provides the best opportunity to read the performance of the item before adjusting the demand and pulling additional inventory ensuring optimal distribution.

Future projection

The future projection of allocations provides a clear picture to the entire organization of the most likely stocking situation in the locations as well as a projection of how much inventory will be moving from warehouses and how much will remain in advance of the end of a season. These are two key advantages for workforce management and markdown planning respectively.

Adapt for promotions and seasonality

because allocation is demand driven, future promotions and seasonal spikes are accounted for and additional inventory is in place in advance of the promotion or seasonal spike to take full advantage of any potential uplift in demand.

Proactive exceptions

by being able to predict demand and ideal inventory, any exceptions are highlighted before they happen, allowing for assortments to be adjusted and emergency plans to be put in place if necessary to reduce the impact of the exception.

Manage initial and ongoing allocations

Allocation strategies can be set up far in advance of the product launch providing initial allocation suggestions which can be used for cross docking when stock arrives and ensuring stores are well stocked for initial launches. After launch, the system learns from actual sales to ensure ongoing allocations are recommended to maximize sell-through potential.

How does Toolio achieve this?

The optimal allocation of inventory is achieved through defining allocation strategies that answer some key questions.

  • What product should be allocated?

    • All eligible products will have an allocation strategy created if it has inventory to allocate or inbound purchase orders. Allocation strategies are defined at the choice level, style/color but executed at a location/sku level.

  • Where should it go?

    • A location list defines the eligible locations for the product in question. This could be based on an attribute of the product, the locations or any other attribute. An example may include winter coats only going to cold weather stores, this can be linked back to the assortment strategy.

  • When should the product be there?

    • Allocation strategies allow for a start date and end date if applicable. This allows the allocator to define the life of the product, especially seasonal or fashion products in advance of them arriving. The advantage of defining a life of a product is to project ending inventory and identify potential inventory exceptions.

  • How Much will sell?

    • Because allocation is demand driven, Toolio provides the ability to set a demand type and the associated demand whether that is from an existing item plan or a predicted rate of sale, the demand plays a key part in projecting the ideal allocation

  • How will specific SKUs behave?

    • The spread model, including a size curve, sales curve, and location curve, provides the flexibility to model the demand expectation at a location/sku level independently, taking into account numerous factors that could predict the performance of a specific item in a specific location.

  • Are there inventory constraints?

    • Inventory constraints are important to consider when allocating, whether there are restrictions of available inventory in the warehouse or minimum and maximum presentation standards in the locations, the allocator can control the flow of inventory to meet these constraints.


Toolio tracks your sales and inventory position by location (including stores and warehouses). So, to be able to generate transfer orders, you will need to:

  • Set up your locations and transit times (Set your sources and destinations)

    • This will be a data file that you import into Toolio.

  • Set up Allocation Strategies by Choice (Style Color)

    • Location Lists (clusters)

    • Start and End and Phase Out dates for your assortments (by door if required).

    • Demand Type

    • Size Curves

    • Sales Curves

    • Location Curves

    • Presentation Profiles

  • Set up presentation profiles - for any minimum and maximum display quantities (maximum coming soon) at the store level (Will be integrated into Allocation Strategies in a more succinct workflow).

Build your Allocation Strategies

Go to your Allocation Plan module and select Allocation Strategies.

Once you are in this section you will be able to set up the Allocation Strategies by Choice

In order for these strategies to work you will need to fill in:

  • Location List, which stores the product is going to

  • Location Curve, location level splits

  • Size Curve, location level size curve and eligibility for the product

  • Demand Type, to indicate whether Toolio should leverage demand from Item Plan module, or a manual override

  • Order Cycle - Enter your order cycle to define the frequency of allocation to the locations

  • Safety Stock - Define the amount of stock you would like to hold in weeks as a minimum in the locations.

  • Start Date and End Date will be the dates you expect to have your choices eligible to be allocated.

Location Level Overrides

You can do location level overrides (on start & end dates or eligibility) by drilling into an allocation strategy, and selecting Allocation Strategy Overrides

Running Allocations

๐Ÿ’ก Once fully set up, allocation runs nightly to generate Recommended Transfer Orders for you to review. The steps below are how to Run Allocations manually to test or after you make Allocation Strategy changes.

  1. Select the choices you want to run an allocation strategy for. You can filter this list by any of your product/variant table attributes. You can also filter using the fields in Allocation Strategy to easily find items by Start Date, Target Order Cycle and Safety Stock, End Date...etc.

  2. Right Click to Get Context Menu

  3. Click Run Allocation Strategy

The strategies will run in the background and you can see the progress in the side menu.

Here are the order of operations:

  1. Review forecast

  2. Review presentation profiles

  3. Review all eligibility flags

  4. Review the start and end dates

Allocation will only generate if a Choice is eligible for a specific location, specific size curve and is within the Start Date and End Date selected in the allocation strategy.

Reviewing the Output

After your strategies are complete, you can go to the context menu (right-click) and navigate to your Allocation Plan default view or your Recommended Transfer Orders pages that will be filtered to the items you have selected in the Allocation Strategy page.

This will create Transfer Receipts from your inventory sources (i.e. warehouses) to destinations (i.e. points of sale) based on all the Allocation Strategies you set up. You will be able to review:

  • Current In Transit Units - Units shipped from your DC that have not been received.

  • Transfer Receipts Units - received vs the total need.

  • In Transit to Place Units - The units needed to be sent. This will be used to create your allocations either via exporting to CSV or via an ERP integration.

Key Views:

Allocation Plan

Toolio - Allocation section

  • Toolio - Allocation Topline will show you by store what your allocations will look like with a drill-down into your categories.

  • Toolio - Allocation Week lets you review your Items with the ability to zoom to door level.

  • Toolio - Allocation Review a view that will help you in any data auditing.

Toolio - Overview section

  • Toolio - Assortment Grid will help you get a visual to your assortments by store and their turn.

  • Toolio - Store Forecast review how your item plan forecasts are broken out by store.

  • Toolio - Current Product Performance review historic product performance by location.

Recommended Transfer Orders

You can access the Recommended Transfer Orders under Allocation > Recommended Transfer Orders.

Here you can create views to download and use as CSV files to import into your ERP or a directly export to your ERP system.

To export Recommended Transfer Orders right click on the screen to access the Context Menu and select the appropriate export action.

โš™๏ธ You can customize the available exporters and whether export is a CSV or direct ERP push via exporter configuration.


Please see how Allocation works in action below

Important Inputs:

Did this answer your question?