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How is the forecast and replenishment calculated?
How is the forecast and replenishment calculated?

What is the difference between the forecast and replenishment amount?

Monica avatar
Written by Monica
Updated over a week ago

Forecasting and Replenishment are the core features of Inventory Planner. The forecast describes predicted future sales, which are used in combination with user-inputted settings (lead time, days of stock, and optional stock rules) to generate replenishment recommendations. These can be used to create purchase orders to a vendor, or transfer orders between locations.


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 configure Forecast Settings correctly.


The Replenishment recommendation for every Variant is based on the Forecast Method & Settings, Forecast Edits, and the replenishment planning settings (lead time and days of stock) for every Variant.

Lead Time and Days of Stock determine the "planning period"; this is the period in which forecasted needs will be evaluated against current stock + units on order (or in transfer) to a location.

In this example, the lead time means that it will take 14 days (Dec 6 - 20) from the time a PO is created to when a PO will be received at the FBA US location. Once the order is received and stock is up-to-date, the days of stock is configured to cover 30 days (Dec 20 - Jan 19) worth of the forecasted needs.

Inventory Planner calculates Replenishment based on the forecasted needs during the planning period, and Min/Max Stock settings (if applicable), and any additional stock needed for Bundles or Assemblies (if applicable).

Please Note: Vendor rules such as Units of Measurement (UOM) and Minimum Order Quantity (MOQ) are not considered in the Replenishment metric. To see Replenishment adjusted based on vendor rules, you can add the "To Order" metric as a column using the gear icon in the top right..

In the same example, Replenishment of 1,753 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 (200) by January 19th.

By selecting the checkbox for this item, an option appears in the bottom left of the Replenishment screen to create a Purchase Order for the recommended units. Multiple items can be added to a PO at any given time. Some stock rules are considered directly in the value displayed for Replenishment, whereas other rules (eg. UOM, MOQ) trigger an alert after an item is added to a PO.

Replenishment & Forecast Details

Forecast and Replenishment details can be viewed at any level by selecting the "i" icon under 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 applied 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 shows the date range of customer orders used to calculate the forecasted demand. Here, only sales from November 3, 2019 through December 31, 2020 are used for forecasting.

Sales (period) is 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, 25,233 units sold during 425 days.

Excluded Holiday Sales: The number of units sold and corresponding number of dates removed from the forecast calculation. Here, 1413 units sold during 24 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 following 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 25,233 units sold over 425 days and then 1413 units over 24 days were removed from the forecast calculation. This results in the Sales for Forecast of 23,820 units sold during 401 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 can be different than 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.

Seasonal Increase: When this option is set (in Account > Settings > Forecast), Inventory Planners will take in to account Holiday Sales seasons (Including Black Friday and Cyber Monday), for items that are non-seasonal.

We check the previous year sales in the months of November and December and if increases are detected, these 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 in active purchase orders to vendors with a destination warehouse that corresponds to the warehouse viewed (includes combined warehouses when a contributing warehouse will receive a PO). Active purchase orders have 'open' or 'partially received' status. Purchase orders with 'draft,' 'closed,' or 'cancelled' status are not considered active.

Note that warehouse transfers will show quantities in the 'transfer in' and 'transfer out' columns. Different from 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 specified lead time. A lead time forecast showing 832 and 'for 14 days' indicates that 832 units will be needed during a 14 day lead time. Note in this case that stock will run out during the lead time. This means that 832 could be sold if there was enough stock to do so.

Lead Time Closing Stock: The estimated amount of inventory available for sale at the end of the Lead Time period. The Lead Time is the amount of time it takes to order a product from the vendor and receive it into inventory. The Lead Time Closing Stock factors in the current stock level, items on order and transferring in/out of the selected warehouse, and units estimated to be sold during this time (indicated as the Lead Time Forecast). Lead Time Closing Stock showing as 0 with a date of January 14, 2021 indicates that the estimated stock level will be 0 units as of January 14, 2021. This date will be 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 1841 for 30 days indicates that Inventory Planner calculates 1841 should sell during the 30 day period (where Days of Stock is set to 30).

"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).

The Days of Stock Closing Stock starts with the Lead Time Closing Stock and subtracts the number of units estimated to sell during the Days of Stock (this is the Days of Stock Period Forecast). Days of Stock Closing Stock showing as -1841.4 with a date of February 13, 2021 indicates that the estimated stock level would be -1841.4 units as of February 13, 2021. This date will be today's date plus the lead time in days plus the days of stock in days. This is tied to the Replenishment recommendation to indicate how many more units are needed to end the Days of Stock period with 0 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, 1842 more units are needed to end the planning period (Lead Time + Days of Stock) with 0 units on hand. The date of December 31, 2020 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 today's date will show.

This 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 inputted here directly in units, or by percent. 

These charts provide information on the Past Sales and Forecasted Sales (last/next 12 months), Forecasted Stock and Lost Revenue (due to Stockouts), and Purchase Order recommendations.

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