Sage Inventory Advisor Basics

Forecasts

The best possible forecast is important because if you don’t know what you are going to sell tomorrow, how can you decide what to buy today.

The forecast tab contains some of the tools to help you create the best possible forecast:

  • Sales and forecast summary: highlighting seasonality and trends
  • Year-on-year comparison: highlighting whether the forecast growth or decline is too extreme or too conservative
  • Forecast exceptions: where sales consistently exceed the forecast or the forecast consistently exceeds sales
 

You can navigate to the Forecasts page by:

  • Clicking on the Forecasts menu (green underline), which displays your default location
  • Using the drop down (green square) on the Forecasts menu and clicking on the required location
 

Forecast dashboard

  • Summary shows sales history and future forecast
  • Comparison shows a year-on-year view, to identify trends
  • Forecast exceptions identify the biggest sales versus forecast anomalies
    • Where sales consistently exceeds the forecast
    • Where the forecast consistently exceeds sales
  • Forecasting performance tracks the forecasting bias
 

Filters

  • Classification; stocked, non-stocked and obsolete
  • Velocity; high, medium and low
  • Status; new, ok, excess, stock-out, potential stock-out & surplus orders
  • Age; how many months of sales history the item has
  • Supplier; for a specific supplier
  • Groups; dimensions specific to your business that are imported into the App
 

Forecast summary

The graphic initially displays a total view for the location selected. The application of any filters will display the summary for the filter selections chosen.

The graphic displays:

  • all sales history imported into the App
  • 12 months of forecast history
  • 12 months of future forecasts
 
 

The default selection for the forecast summary is cost price.

Other options may be selected via the dropdown.

 

Forecast comparison

The comparison gives a year-on-year view of how:

  • Sales have been increasing, remaining flat or declining
  • The future forecast for the next year

This view enables a quick analysis of year-on-year sales growth/decline and allows you to check whether the future forecast is continuing this trend or not.

 

The default selection for the forecast comparison is cost price.

Other options may be selected via the dropdown.

 

Top “sales exceeds forecast” items

The exception list shows the top 5 items where sales have been exceeding the forecast, ranked in descending order of variance value.

The variance calculated depends on the period chosen:

  • 3 periods
  • 6 periods
  • 12 periods

Your goalremove items from the list by reviewing and, if appropriate, increasing the forecast (which may lead to improved fill rates and reduced potential stock outs).

To view the full list of skus, click on the Full report option.

 

Top “forecast exceeds sales” items

The exception list shows the top 5 items where sales have been lagging the forecast, ranked in descending order of variance value.

The variance calculated depends on the period chosen:

  • 3 periods
  • 6 periods
  • 12 periods

Your goalremove items from the list by reviewing and, if appropriate, decreasing the forecast (which may lead to reduced excess stock generation).

To view the full list of skus, click on the Full report option.

 

Forecasting performance

The forecasting performance tracks the level of forecast bias over time.

The graphic shows:

  • Sales value for each month
  • Sales exceeds Forecast value each month
  • Forecast exceeds Sales value each month

Trends to aspire to:

  • that the overall level of sales versus forecast exceptions is reducing
  • that the bias, if any, is slightly towards sales exceeding forecast

Note: Forecast exceeds sales is worse than Sales exceeds forecast because it means that the forecast is larger than what we are selling. This may result in over-buying, may lead to excess inventory and ties up cash that we could use to avoid stocking out.