Click on the Forecast tab within Settings to customize account-wide settings affecting the sales forecast and related analytics. Forecasting is one of the core features of Demand Planner. Forecasted sales drive your recommendations for replenishment.
Forecasting Methods
Forecast settings can set based on multiple forecast methodologies:
- Recent sales and trends
- Last sales
- Seasonal
- Top-down
- Top-down Seasonal
Recent sales and trends
This method uses recent sales and stockouts during the specified sales period when generating a forecast. Demand Planner calculates sales velocity and trend-based customer orders placed during this timeframe.
Note: Holiday sales such as Black Friday, Cyber Monday and the week before Christmas are excluded when using this method so that unusually high sales do not skew forecasting calculations.
The sales period and trend can be adjusted by variant by clicking the "i" icon under the 'Details' column. Then navigate to the Forecast Settings tab and enable 'Use Custom Forecasting Settings'.
Last Sales
This forecasting method is best for non-seasonal products. It is based on the average sales for the last "X" number of days, where you set the number of days.
If the setting is enabled to "adjust forecast using stockouts" then the forecast will only look at periods when the product had available stock to calculate the sales velocity.
For example, if the number of days is set to 15 the algorithm will:
- Look at sales and inventory over the last 15 days
- If the product went out of stock during the last 15 days, it looks at the past 15 days when there was available stock to calculate the sales velocity, i.e. sales during stockout periods are ignored
- If the product had no inventory in the last 15 days, it uses the last sale date when it was available, then looks at sales and stock from the prior 15 days to calculate the sales velocity
New accounts: Brightpearl tracks inventory and sales history starting with the day you go live. Since we cannot see past stock, we will look at the 'Last Sold At' date then add sales from the prior X days to calculate sales velocity
Exclusions: the following are ignored using this forecast method:
- Manually inputted stockouts
- Manually adjusted sales history
- Wholesale orders
- Trends
Seasonal
This forecast method refers to the same months in prior years as the sales reference period. This is beneficial for holiday and seasonally driven items with 12+ months of history. Sales velocity is not a consideration in this case. Trend is applied by evaluating sales over the last 12 months vs. the prior 12 months.
Top-down
This setting computes a seasonal forecast at category level then distributes forecasted sales to each variant. The last 2 months of sales are used to determine each variant's % contribution to the total unit sales of the category.
For example, if Variant A contributed 5% of the sales units to Category Z during the last 2 months, then Variant A will receive 5% of the category's forecasted sales in upcoming months.
Note: if a category has less than 12 months of history, forecasts are first computed at the store-wide level then distributed to the variants.
Top-down seasonal
This setting computes a seasonal forecast at category level, then distributes forecasted sales to each variant. When an item has 12+ months of sales history, the same time period in prior years is used to determine each variant's % contribution to the total unit sales of the category. For items with less than 12 months of sales history, it defaults to the top-down, non-seasonal method.
For example, if Variant A contributed 5% of the sales units to Category Z last December, then Variant A will receive 5% of the category's forecasted sales for next December.
Forecast settings
Adjust forecast using out-of-stock information
By default, Demand Planner takes out-of-stock information into consideration. This means that the forecast will exclude the time a product is out-of-stock so that the sales velocity is not understated. If your store allows overselling (continued selling even when an item is out-of-stock), then you should uncheck the box for "Adjust forecast using out-of-stock information".
Enable forecasting for wholesale customers
This setting allows the ability to separate wholesale orders from regular, replenishable demand. Replenishment recommendations will add wholesale needs on top of regular demand. Learn more about wholesale planning here.
Apply seasonal increase for non-seasonal products for Black Friday and Christmas
When this option is set, Demand Planner takes holiday sales seasons, including Black Friday and Cyber Monday, into account for items that are non-seasonal.
The previous year sales are checked in the months of November and December and if increases are detected, these are automatically applied to your future forecast for these times.
Produced bundles by default
This setting considers all bundles to be produced bundles. If all bundles in the account are assembled prior to fulfillment (that is, the stock of bundles is separate from stock for each of its components) then this setting should be enabled. If bundles are assembled at the time of fulfillment, then do not check this box. Learn more about bundles and packs here.
Trends months
The default forecast in Demand Planner uses sales velocity and considers recent trends. You can adjust the number of months that have an effect on the forecast.
Default replenishment
Default replenishment can be set for products that don't have a sales history. For example, if an item is recommended to replenish zero units because it doesn't yet have any sales, a default replenishment of 5 will create a replenishment recommendation of 5 units.
ABC Class or “A” Class, “B” Class, “C” Class
Classes are categories of your inventory. By default, “A” Class includes SKUs comprising the top 80% of revenue, “B” Class is the next 15%, and “C” Class is the final 5%.