Key Takeaways
- Forecasting uses sales history, seasonality, festivals and promotions.
- Safety stock and reorder points should be based on demand variability and lead time.
- Start with top-selling items and measure forecast accuracy.
Indian demand swings with festivals, weddings, monsoons and promotions. Gut-feel buying leads to stock-outs on fast movers and dead stock on slow movers.
Data inputs
- 2+ years of sales by item and location
- Promotions and price changes
- Festival and seasonal calendars
- Supplier lead times
- Stock-out periods (to avoid underestimating demand)
Outputs
| Output | Use |
|---|---|
| Item-level forecast | Purchase planning |
| Safety stock | Buffer for uncertainty |
| Reorder point | When to order |
| Order quantity | How much to order |
Getting started
- Clean sales data
- Forecast top 20% items by value
- Compare forecast vs actual monthly
- Expand to more items
See AI in ERP and dead stock reduction.
Planning a inventory software project?
Light Animation has designed and built software and websites for brands like Godrej, Saras Jaipur Dairy and Jaipur Traffic Police. Share your requirement and get a free consultation and estimate.
Explore Inventory Management SoftwareGet a Free QuoteRelated reading: Dead Stock Reduction · AI in ERP
Frequently Asked Questions
What is demand forecasting?
Predicting future sales of products using historical data and other factors to plan inventory.
How accurate is AI forecasting?
Accuracy depends on data quality and demand patterns; AI often improves on manual methods for many items.
What is safety stock?
Extra inventory held to protect against demand and supply variability.
Can small businesses use forecasting?
Yes, many inventory tools include basic forecasting features.
