Fast-moving items with high demand have shorter forecast periods. For items that sell every day, you want to include the demand of any day that the item was out of stock to prevent future lost sales. The percent that you set determines the number of days by which the system recommends to increase demand.
To ensure that you are counting the days the item is out of stock, set the Lost Sale parameter to a higher percentage.
The system eliminates exceptional sales from the demand calculation before including lost sales in the demand forecast.
The system uses the lesser of one of the following values to increase the item's raw demand:
The number of days that the item was out of stock during the forecast period.
The Lost Sale percentage multiplied by the number of days in the forecast period.
Compare the effect of two different Lost Sale percentages for fast-moving items:
|
Days out of stock |
Forecast period |
Lost Sale percentage |
Forecast period Lost Sale % |
Increase item demand by... |
|
25 days |
90 days |
80 |
72 days |
25 days |
|
25 days |
90 days |
20 |
18 days |
18 days |
By setting the Lost Sale percentage to a higher value for fast-moving items, the system increases demand by the days the item was out of stock, thereby avoiding future lost sales.
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