Sales forecast is one of core features of Inventory Planner and is used as input for replenishment suggestions. The default forecasting method in Inventory Planner is based on historical sales for each product. We use the sales velocity that excludes periods of time when product was out of stock and also analyze recents sales trends.
If a product is marked as seasonal, the forecast will give more weight to sales 12 month ago instead of latest trends. This is a good way to account for holiday spikes
You can enable this account-wide in Account > Settings
or for selected products in Replenishment using Bulk Actions > Set Seasonality. (Bulk Actions appears after selecting specific items with the checkbox.)
Inventory Planner automatically collects when a product is out of stock starting from the moment you connect your store to Inventory Planner. This data helps to estimate the demand correctly. For example, if you sell on average ten units of product A per month and the product is out of stock half a month the real demand for it is 20 units. Without taking stockouts into account, the forecasted demand could be too low.
By default, your account is set to take into account stockouts. If your store allows overselling (continuing to sell an item even when it is out of stock), then you should change this setting to disregard out-of-stock information. You can change this for all products in Account > Settings
If you would like to change this setting for only a set of products (not your entire account), in Replenishment, select items > Bulk Actions > "Don't adjust forecast using stockouts".
This setting can also be changed via variant details > Edit Forecast.
> Edit Forecast
You can manually edit days out-of-stock for previous months in variant Details
> Edit Forecast
> Past Sales.
Top-down forecasting should be used for seasonal products that do not have 12 months of sales history. When it is enabled, Inventory Planner computes sales forecast for the product category and breaks it down into products, taking into account each product contribution into the category. For example, if Product A contributes 2% of revenue to Category Z, then the forecast will continue to show a 2% contribution of Product A to the category following seasonal trends of the category.
You can enable top-down forecasting in Account > Settings.
Note: If you need to make additional changes to your forecast, read our article about the Edit Forecast functionality.