Overview
As a planner, you are building sales plans and receipt buys based on historical information with current trends. In order to do this accurately, you are probably reviewing your sales in detail to figure out when were you fully in stock to find the best sales rate to build your new plans.
This is a time consuming (although necessary) task. Without proper review and hindsighting, you could potentially be deriving inaccurate forecasts based on the historical data flaws.
Toolio recognizes this pain point and have developed our demand metrics to show you what sales could have been based on having the stock. You build your demand metrics by setting your look back period and minimum WOS to determine whether a week is a "good week" or not.
Workflow
Setup
Go to the settings section in toolio. On the left-hand navigation panel select the Demand menu item.
There are a few fields that need to be filled in:
Lookback Period- The amount of weeks to lookback to average the demand.Target WOS- The weeks of supply (BOP / (Demand /Lookback Period)) that you would consider to be high enough to support theGross Sales Unitsfor that particular week.Gap Weeks Allowed- This is the amount of non-good weeks in a row before we stop calculating demand (this helps with over indexing what your total sales could have been).Demand Algorithm- Currently we haveRolling Averagewhich is applied to the sku level and location level depending on your location configuration.First Inventory Date- This is theYearandWeekyou want to start the algorithm.
Good Week Concept
In order to determine the Demand Units we need to identify when sales were affected by stock outs or abnormalities in trend.
Here is a simple example:
Let's review week 7. That is counted as a good week (GW) based on the Lookback Period and the WOS Target. The calculation = BOP wk 7 / ((wk 5 + wk 6 demand) / 2).
15 / ((10 + 20)/2) = 1 WOS
In this case
Demand=Gross Sales Units
Now week 8 is not a good week (GW) based on the criteria.
8 / ((20 + 10)/2) = .53 WOS
Demandfor week 8 is now calculated by the average of wk 6 and wk 7Demandgiving us 15 units.
Metrics
The Demand and Missed Opportunity Metrics are located with all other metrics, so you can add them in to any of your views. You will want to use the Act variant.
Below is a view that we made to highlight the variance between the Gross Sales Units and the Demand Units.
Future
We will be using the Demand metrics to be the root of the forecast function to ensure that we are forecasting correctly even with stock outs.
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