- What are Stockouts?
- Enable or Disable the 'Use Stockouts History' Setting
- How do Past Stockouts Impact Forecasting & Replenishment?
- How do Past Stockouts Impact KPI Reports?
- Adjust Past Stockouts Data
- Import Past Stockouts
What are Stockouts?
When we calculate your forecasted sales, settings can be enabled to adjust your forecast based on stockouts during a specific period of time.
Stockouts = the number of days when a product is out of stock.
Inventory Planner automatically detects 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.
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.
Inventory Planner cannot import stock history from your platform, so stock-related information starts with the account start date. Past Stockouts can be imported using the steps below.
Enable or Disable the 'Use Stockouts History' Setting
You can enable or disable "Use Stockouts History" for all items in your account under Account > Settings
> Forecast - then check the box for Use Stockouts History.
You can also set adjust this on the SKU level instead of the store level if needed under custom forecast settings by selecting 'Details' for any item, or by selecting items and using Bulk Actions > Set Forecast Settings.
How do Past Stockouts Impact Forecasting & Replenishment?
There are two key implications when "Use Stockouts History" is enabled:
1) Forecasted sales velocity/day increases as the # of past stockouts increases (within the sales period referenced for forecasting).
In the below example, Nov 2019 - Feb 2020 is configured as the Sales Period for Reference. In January, sold units were restricted to 1,000 units since 15 days were out-of-stock. In this case, 15 days are removed from the denominator when calculating the adjusted sales velocity. So for January, the real demand was 67/day (vs. 33/day). Without taking stockouts into account, the forecasted demand would be too low.
Note: if an item was out-of-stock for more than 27 days in a given month, that month is ignored when calculating the adjusted sales velocity using a non-seasonal forecasting method. If a seasonal method is used, average sales from surrounding months will be used in its place.
2) Backorders are not forecasted during the Lead Time period in the case that stock is forecasted to sell out while waiting for new stock to arrive.
Another key consideration with the "Use Stockouts History" setting is if/how backorders should be considered during the Lead Time period. With the setting enabled, no backorders will be forecasted in the case that stock runs out while waiting for new stock to arrive.
Disable "Use Stockouts History" to forecast backorders during the Lead Time period. In this case Replenishment considers any & all sales that could take place during the Lead Time + Days of Stock period.
To view the Forecast Lost Sales, Revenue, and/or Profit due to predicted stockouts that forecasted take place during the Lead Time period, select the date range in the top right of the Replenishment Report, then click on Columns (using the gear icon in the top right) and Filters to add metrics.
Note: Refer to the Glossary of Terms anytime for definitions of metrics, columns, and filters available in Inventory Planner.
How do Past Stockouts Impact KPI Reports?
Understanding how Stockouts % and In-Stock % are calculated is a key step to understand how reports are generated for viewing Past Lost Sales, Revenue, and/or Profit using the Inventory KPI Report.
Select the date range in the top right for your Report, then click on Columns (using the gear icon in the top right) and Filters to add metrics.
Stockouts % and In-Stock % consider the % of time items were out-of-stock or in-stock during a defined period. All metrics are calculated at the Variant (SKU) level. Use the top left dropdown to aggregate reports in different dimensions - eg. by category, by vendor, or Total.
- Stockouts % = out-of-stock days during the period / all days in the period.
- In-Stock % = 100% - Stockouts %
Stockouts are tracked by Variant, by Day. When KPI Reports are aggregated, Inventory Planner first sums together the number of all daily stockouts during the period then divides this by the # of current tracked variants * days in the period.
For Example, in Category = "Dresses" -
- Jan 1st: 5 variants in stock / 10 tracked variants
- Jan 2nd: 15 variants in stock / 20 tracked variants
- Stockouts % for Jan 1-2 = (5+5) / (20*2) = 25%
You can also add Variants in Stock to see the current number of tracked variants in stock within an aggregated set of data.
KPI Reports can also be filtered by metrics such as Stockouts, Stockouts % and Sell Through %; to limit the data in the reports view respectively.
Adjust Past Stockouts Data
Past stockout data can be adjusted for a single item at a time, or for multiple items at once using a CSV import.
To adjust past stockouts for a single item, select the "i" icon under the 'Details' column for a specific item:
> Replenishment & Forecast
> Toggle to 'Past Sales' in the 'Edit Forecast' table at the bottom.
Import Past Stockouts
If you have stockout history available, you can export the information then import past stockout into your new Inventory Planner account. This can help to improve the accuracy of your forecasts.
* Note: importing stockout history does not adjust the stored stock history, only the number of stockouts.
If you would prefer to import your Past Stock History instead, this can be seen explained in the following article:
Importing Stockout History
Create a spreadsheet with the following information in 3 total columns and including a column title for each:
- SKU or other identifier such as Title, ID (used by your sales platform), Inventory Planner ID, Vendor Reference, or Barcode.
- Month when stockouts occurred using 'mm/yyyy' format, for example 1/2019.
- Number of stockouts during that month. Each day when the item was out of stock will count as a stockout.
Go to Replenishment > Import > Stockouts.
Click to Select or Drag the file you've created with stockout history, to the import section.
We also offer the ability to download a CSV template.
In the import dialog, be sure to select the correct identifier. SKU will be the identifier used by default.
Also select the warehouse that this information relates to.
When all fields are matched to the corresponding field in Inventory Planner, select Import.