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Forecasting Function - Discount Calculation
Forecasting Function - Discount Calculation

Review of the discounts applied to the forecasts in our Item Plan forecast function.

Updated over a week ago


Week to week sales trend can happen organically through seasonality, or from other variables such as marketing and discounting. A common practice to help your customers convert is to give a discount. There are many strategies for this. Discounts can be done at the customer level, order level, or item level and any blend of. In this article, we will focus on how to add discounts and lifts using the forecast function.


In the Forecast function menu you can locate the Discount Calculation field under the Advanced Section.

Expanding this section will give you access to advanced optional inputs to run a forecast. Under the Discount Calculation we have 2 options currently. Default and Manual.


  • Default - The Gross Sales Retail total from the Volume Method dropdown / the Gross Sales Ticket total in the Volume Method dropdown * forecasted Gross Sales Ticket. Basically, it is taking the discount rate from the trend you are looking at and applying that forward.

    • This method is good when your discounts are consistent and the normal discounts you see due to customer and order level discounts.

  • Manual Rate - Fields will show that need to be filled in.

    • Discount Rate - This will be the rate you want to discount the AIR (Average Initial Retail) by.

    • Unit Lift - This will be the lift you are expecting to get with the discount applied. This lift we be applied on top of what the normal build/debuilds would be expected due to seasonality. You can use or create reports in your Item Plan Module to identify what the lifts are when taking certain discounts based on historical data or comparable items. reporting article

    • Discount Range - Select the time frame that this discount and lift will be applied. Afterward it will go back to the Default calculation.


Click on the below image to zoom in and see the results.

  • Wk 22 - Wk 23 are using the Default forecasting methodology as they were not included in the selected Discount Range.

    • The current volume trend was calculating out to be 8.18% greater than last year and that is what is forecasted for these weeks.

    • The volume trend discount % was 4.95% on average over the past 4 weeks so that was applied to Wk 22 and Wk 23 as well.

  • Wk 24 - Wk 26 will have the Manual Rate applied.

    • This is where the additional lift is applied and Wk 24 builds by 1.50 over Wk 23. Looking at last year (the seasonality applied before Discount Calculation) the build was flat to Wk 23 into Wk 24 (1.00).

    • The % Var Act/Plan vs. Act LY over last year goes from 8.18% to 62.27% based on this lift.

    • The Discount % goes from 4.95% to 25% and you can see in the Gross Sales AUR the price go to $200.25 from $253.80.

  • Wk 27 - Wk 28 (and forward based on the forecasted timeframe) go back to the Default calculation of forecasting.

    • There is a debuild into Wk 27 by 0.63 to get back in line with the seasonality.

    • The % Var Act/Plan vs. Act LY goes back to the 8.18%.

    • The Gross Sales AUR and Discount % are also back to the Default calculation.

Next Steps

From here you can determine if the discount % is needed or not. It could build your Sales $'s but what happens to the Gross Margin $'s? Is this discount to drive sales or clear our a bit of inventory? What does discounting this item do to the rest?

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