Best Practices for Inventory Forecasting and Improving Inventory Turnover ! Make Up Your Mind to Discover Apply Succeed!!

Best Practices for Inventory Forecasting

Start by gathering as much data about your sales history as possible. Six months is a good starting place, but a year or two of data can give you better insight into monthly demand. And ensure your data is accurate. Here are some other best practices to consider implementing.

• Build a team that collaborates in developing the forecast.
• Use an inventory management program that works well and provides documented processes.
• Keep a close eye on inventory turnover and whether you meet benchmarks.
• Use qualitative information to drive forecasting.
• Use all available historical supply and demand data.
• Calculate all past margins and profits and future goals, such as gross profit margin.
• Use the reorder point formula.
• Carefully measure sales trends so you can be as precise and accurate as possible.
• Use the lead time to better understand demand.
• Calculate safety stock.
• Use software that supports your forecasting needs.