Effective inventory analysis and the resulting demand forecast can make or break the business.
Not only inventory analysis and Demand Forecast It helps to retain capital for more effective purposes, but it also helps to reveal opportunities and opportunities for growth.
Generally, companies use eight main inventory analysis and demand forecasting strategies to analyze current conditions to predict the future.
From demand analysis to software, and any combination of the two, here are eight main inventory analysis and demand forecasting strategies:
A popular method for inventory analysis and demand forecasting is called demand type. In its simplest form, this is an analysis of the demand pattern of a particular project over time. The shape of the demand on the chart will determine the “demand type” of the product under analysis, such as X demand type (with sharp fluctuations), Y demand type (with consistent demand), etc.
As the name suggests, the trend is to look at products from the perspective of growth throughout the product cycle. This will check whether the relevant product is a commodity, staple food, fashion, seasonal, disruptive product or other type of product.
The seasonal analysis of demand forecasting looks at the historical inventory sales at a specific time of the year in order to best predict the demand for the next season. Seasonality also mainly relies on historical data, and it also applies to goods and services that are only available or only in large quantities at certain times of the year.
Qualitative data attempts to coordinate various data points to have an overall understanding of the development direction of future needs. Some of the points that may be included in the analysis are future events, the activities of competitors, and overall market trends.
“Real demand” analysis
Demand may be affected by so-called “abnormal” events that can bias the data you are trying to make future predictions. “Real demand” analysis attempts to remove these outliers in order to generate a clean set of data based on actual, consistent trends.
Forecast accuracy is an attempt to quantify various forecasts in a mathematical format in order to make the best decisions for your business in the future. The advantage here is that a series of data points and projections can be made and synthesized. In addition, the entire range of events and impacts can be considered during this analysis.
Demand forecast period
The general rule is that the shorter your projection period, the more likely it is to be accurate. In other words, predicting what will happen next month is more accurate than predicting the next 12 months. In theory, setting a regular forecast period should improve the company’s ability to accurately forecast demand.
Software increasingly uses the above-mentioned various strategies to analyze current inventory and forecast future demand.These tend to run in the following categories Inventory optimization Software and statistical demand forecasting system.