Forecasting and replenishment are the core features of Inventory Planner. While they are related, they are distinct values.

The forecast describes predicted future sales, which are used in conjunction with user input (lead times, days of stock, and optional stock rules) to generate replenishment recommendations.

Replenishment recommendations can then be used to place purchase orders with a vendor, or create transfer orders between locations.

This article will discuss the differences between them and detail how they're calculated.

There are multiple forecast methods that incorporate seasonality, trends, and past stockout information differently. Forecast methods can be set account-wide, or they can be customized by variant.

To get the most from Inventory Planner's replenishment recommendations and purchase order functionality, it is important to correctly configure your forecast settings.

Learn how to configure forecast methods and settings in Inventory Planner here.
​

The replenishment recommendation for every variant is based on the forecast method and settings, forecast edits, and its individual replenishment planning settings (lead time and days of stock).

Lead time and days of stock determine the planning period. The planning period is the period in which forecasted needs will be evaluated against current stock + units on order (or in transfer) to a location.

In the following example, the lead time of 14 means that it will take 14 days (Nov 29 - Dec 13) from the time a purchase order is created to when it will be received at the FBA US location. Once the stock on the order is received in, there should be enough stock in the location to cover the forecasted needs of the days of stock of 30 days (Dec 13 - Jan 12).

Inventory Planner calculates replenishment based on the forecasted needs during the planning period, the min/max stock settings (if applicable), and any additional stock needed for bundles or assemblies (if applicable).

In this example, a replenishment recommendation of 21 means that this many units are needed (above and beyond the units in stock + on order + in transfer) to cover forecasted needs through the end of the planning period, so that stock will reach the minimum quantity (50) by January 12th.

On the Replenishment report, selecting the checkbox for an item displays an option to create a purchase order for the recommended units.

Multiple items can be added to a purchase order at any given time. Some stock rules are factored directly into the value displayed for replenishment, whereas other rules (e.g. UOM, MOQ) trigger an alert after an item is added to a purchase order.

Forecast and replenishment details can be viewed at any level by selecting the "i" icon in the Details column for any item in Replenishment, Edit Forecast, and Reporting. 

Forecast details can be seen by clicking the "i" icon under the Details column in Replenishment or Reporting.

This portion of the screen displays details about how the forecast and replenishment is being calculated.

The forecast method indicates how the sales history and settings for this variant are used to calculate additional stock needs. Learn more about the forecast method, how to configure forecast settings for your account, and how to customize settings for a variant.

Sales period for forecast: The date range of customer orders used to calculate the forecasted demand. Here, only sales from June 1, 2022 through June 30, 2023 are being used for forecasting.

Sales (period): The number of units purchased by customers during the specified date range (above) and the corresponding number of days in that range. In this example, 645 units sold during 395 days.

Excluded holiday sales: The number of units sold and corresponding number of dates removed from the forecast calculation. Here, 18 units sold during 12 days are excluded from the forecast. Hover over the "?" to see detail about sales and dates.

For non-seasonal forecasting methods ("Recent sales & trends" and "Last sales"), it can be helpful to exclude certain periods of unusual sales from the forecast calculation. For example, by excluding Black Friday and Cyber Monday sales, the forecast the following weeks and months will not be overstated due to a spike in sales. Configure excluded sales in Account > Settings > Forecast.

Sales for forecast: The number of units purchased by customers during the specified date range (above) and the corresponding number of days in that range after removing the Excluded Holiday Sales.

In this instance, the variant started with 645 units sold over 395 days and then 18 units over 12 days were removed from the forecast calculation. This results in the Sales for Forecast of 627 units sold during 383 days, which is used to calculated the sales velocity.

Adjusted sales velocity: The adjusted sales velocity is based on forecast heuristics such as excluding holiday sales. This may be different to the sales velocity calculated as sales/number of days in stock.

If your forecast method ignores stockouts, this will show as adjusted average sales, which is the number of units sold during days in the period (not removing days without stock).

Trend: Indicates an effect on the forecast. The default forecast in Inventory Planner (Recent sales & trends) uses sales velocity and considers recent trends. Adjust the number of months to create a trend.

If "trend months" is set to 2 and you see increased sales for an item from March to April and again from April to May, a growth trend will be incorporated when forecasting June.
​

Read more about how trends are applied differently based on your selected forecasting method.

Seasonal increase: When this option is enabled (in Account > Settings > Forecast), Inventory Planner will take holiday sales seasons (including Black Friday and Cyber Monday) into account, even for items that are not seasonal.
​
Inventory Planner checks the previous year's sales in the months of November and December and any detected increases are automatically applied to your future forecast for these times.

Current stock: The number of units available for sales as of today's date (can be different than the number of units on hand due to order fulfillment status).

On order: Indicates the number of units on active purchase orders which have a destination warehouse that corresponds to the warehouse currently being viewed (including combined warehouses when a purchase order will be received into a contributing warehouse).

Active purchase orders have a status of 'open' or 'partially received'. Purchase orders with 'draft,' 'closed,' or 'cancelled' statuses are not considered active.

Note that warehouse transfers will show quantities in the 'transfer in' and 'transfer out' columns. Unlike purchase orders from vendors, warehouse transfers have a source and destination warehouse.

Sells out in: The number of days until a product will be out of stock. 'Sells out in' starts with your forecast, then takes into consideration your current stock and any items on order to calculate when you'll run out.

'Sells out in first' shows if stock run out before a PO arrives (based on expected date).

To see when current stock will run out, use 'stock cover in days'. Read about Sells Out In and related metrics here.

Lead time forecast: The number of units that Inventory Planner estimates will be needed during the variant's lead time. A lead time forecast showing 28 and 'for 15 days' indicates that 28 units will be needed during a 15 day lead time.

Note that in some cases, stock will run out during the lead time. The lead time forecast will then state how many units could be sold if stock was available.

Lead time closing stock: The estimated amount of inventory available for sale at the end of the lead time period. The lead time closing stock factors in the current stock level, items on order, items being transferred in/out of the selected warehouse, and the number of units estimated to be sold during this time (indicated as the lead time forecast).

A lead time closing stock figure of 81 with a date of December 14, 2023 indicates that the estimated stock level will be 81 units as of December 14, 2023. The date is today's date plus the lead time in days.

"Days of stock" period forecast: The number of units that should sell during the days of stock period. This "days of stock" period forecast reads 54 for 31 days, so Inventory Planner calculates 54 units should sell during the 31 days 'days of stock' period.

"Days of stock" closing stock: The estimated amount of inventory available for sale at the end of the days of stock period. The days of stock is the number of days that inventory should cover and starts after the lead time (time it takes to order and receive inventory from your vendor).

It starts with the lead time closing stock and subtracts the number of units estimated to sell during the days of stock (i.e. the days of stock period forecast). The days of stock closing stock showing as 29.3 with a date of January 13, 2024 indicates that the estimated stock level would be 29.3 units as of January 13, 2024. This date is today's date plus the lead time in days plus the days of stock in days. It's tied to the replenishment recommendation to indicate how many more units are needed to end the days of stock period with 50 stock (the minimum safety stock).

Replenishment: Replenishment is based on forecasted demand and indicates how many more units are needed in order to meet customer demand. It takes into consideration current stock, on order or transfer quantities, continued selling during the lead time, and how many units are needed to meet demand during the days of stock.

Here, 21 more units are needed to end the planning period (lead time + days of stock) with 50 units on hand. The date of December 16, 2023 shows the replenish date, which is the last day to order to avoid being out of stock. If stock is forecast to run out during the lead time (or is already at 0), then the replenish date is today's date.

The edit forecast table shows the past sales (last 12 months) and forecasted sales (next 12 months). The data correlates to the forecast sales chart. Overrides to the forecast can be directly input here in units, or by percent. 

Learn more about editing the forecast here.

These charts provide information on the variant's past sales and forecast sales (last/next 12 months), forecast stock and lost revenue (due to stockouts), and purchase order recommendations.

Clicking on the headers in the graph key below the chart will toggle visibility of the related metric.