2 Secrets to Manage Slow Demand Products that Make You Money
Slow Demand products comprise 35-40% of most retailer assortments and cannot be eliminated. To profitably sail the Slow Demand Product seas, you must be equipped with a proper forecasting engine. You have taken an essential step in your destination to increase demand forecasting accuracy by providing a forecasting engine that utilizes the correct algorithm for slow-demand products.
Demand Forecasting: The Boat Must be Functional?
More than 85% of the current demand forecasting systems only use 2 forecast algorithms and a collection of ‘models.’ Many software companies claim to have hundreds of algorithms when they have only one or two algorithms and several models. Legacy systems often need algorithms for intermittent and slow-demand products. But in today’s fast-paced business world, we can’t afford to rely on outdated methods. To achieve an optimized inventory, we need an accurate demand forecast, which can only be reached with updated, modern demand forecast solutions. The good news is, these solutions are not only more accurate but also cost significantly less money.
Inventory Management Success: A Bright Future with Accurate Demand Forecasting. As Jimmy Dean once said, “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” In the context of inventory management, this means that while we can’t control demand fluctuations, we can adjust our strategies based on accurate demand forecasts to always reach our inventory management goals.
Read: Great Sales Forecasting Equals Out of Stock
Stock Model Factors
The core problem is this: forecasting algorithms are deterministic. In other words, if you put X, Y, and Z into a forecasting algorithm, you’ll always get the same result. The result of a demand-driven forecast is wholly divorced from planning inputs. Otherwise, why bother forecasting at all. The wrong algorithm in your forecasting engine will consistently deliver subpar results.
Ship Shape
Keep Your Boat Fully Functional: The Key to Effective Inventory Management. As business professionals, it’s our responsibility to ensure our inventory management systems are always in top shape. To ensure your boat is fully functional, Contact Us for a free consultation about your forecast accuracy and inventory management opportunities, or request a free demo to see how you can fix your engines and safely reach your destination.
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