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Forecast screen
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Written by Sara Jaffer
Updated over 4 months ago

Viewing and understanding the forecast

To view the forecast, click the “Forecast” button on the top navigation bar. You will be taken to the forecast screen with the default view applied. Learn more about views here.

The forecast screen is comprised of two sections:

  • Lookback

  • Monthly forecast

Additionally, you can click on a variant’s name to view forecast details for any individual variant. Learn more about a variant's forecast details here.

The lookback section allows you to choose the period of time in which you would like to consider data for the forecast, and displays data related to that period. That data is then used to calculate the forecast.

The monthly forecast takes the data from the lookback section and projects it forwards, using our “Linear Average” forecasting method.

With the linear average method, the average sales per day is calculated using historical data. Then, that average is multiplied by the number of days in each month going forwards, before being further adjusted up or down using a percentage.

Learn more about how the historical data is used and how the forecast calculations are made below.

Lookback data and calculations

The lookback period defines the data you’re using as the basis of your forecast.

The period you set determines how much data is used to work out the sales velocity (i.e. the average sales per day).

The lookback period should be chosen depending on the variant’s sales behavior. For stable products that sell evenly throughout the year, we recommend using a longer period. If your product’s demand changes seasonally, you might only want to consider a few months, or even a few weeks if it’s particularly trendy. Learn more about choosing a lookback period here.

Lookback periods are set per product variant.

Field

Description

Set by user?

Lookback period

Sales and inventory data in this period will be used to calculate the sales velocity.

The lookback period is set in days, and is not inclusive of today’s date. For example, on March 15th, a 14-day period would encompass March 1 to 14.

By default, the lookback period is set to 365 days.

Y

Pick from:

  • 14

  • 30

  • 90

  • 180

  • 365

Sales

The number of sales that were placed, minus the number of returns made, during the lookback period.

Note that returns are counted on the date they were made, not the date of their original sale.

N

Sellable days

The total number of days in the lookback period where the variant could be sold.

A variant can be sold if:

  • it is published, and

  • it had inventory, or “Continue selling when out of stock” is enabled in Shopify

For example, if the lookback period was 14 days, but the variant was only published with stock a week ago, the sellable days would be 7.

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Velocity

The velocity, or sales velocity, is the average sales per day for the lookback period chosen. By working out the average sales per day, Inventory Planner Essentials can predict the demand for future months.

Velocity is calculated by dividing sales by sellable days.

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Last 7 days velocity

In addition to the velocity for the lookback period, you can view the average number of sales per sellable day over the last seven days.

This figure doesn’t affect the forecast, but is available for comparison purposes.

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Monthly forecast

This section uses the sales velocity to calculate the expected sales for the following 18 months. All of the following fields are available for each variant, and the calculations are repeated for every month.

Note that the "Monthly sums" column displays calculations for the current month.

Field

Description

Set by user?

Base forecast

The base forecast is calculated by multiplying the velocity by the number of days in the month.

Note that for the current month, the sales velocity is multiplied by the number of days remaining in the month. See “Adjusted forecast” for more information.

N

Adjustment

An adjustment to the base forecast, entered as a percentage increase or decrease.

The adjustment represents the increase or decrease you expect to see for the month, based on the average sales per day.

Setting the adjustment to 100% will double the forecasted sales. Setting the adjustment to -100% will reduce the adjusted sales to 0.

Y

Adjusted forecast

The final forecasted demand after applying the adjustment.

Hovering over the i icon will tell you how many days are remaining in the current month, what the sales to date are for the current month, and what the expected total is for the month (adjusted forecast + sales to date).

N

Adjusted velocity

The forecasted average sales per day over the course of the month once the adjustment has been taken into account.

N

Views, filters, searching and sorting

Views

Views in the Forecast screen are catered to specific workflows. Learn more about how views support workflows here.

Filters

Filters apply within a view. When you apply a filter, you’re filtering on the variants already displayed using that view.

If you’re filtering one view and switch to another, the same filters persist.

The available filters are:

  • Vendor

  • Category

  • Collection

  • Brand

  • Purchase date (a date range, from today’s date to a future date)

All are single-select unless otherwise stated.

Searching

The search function allows you to search the current view by product name or SKU. The view will be filtered to only display the results of the search.

Sorting

Every view has a default sorting. However, some column headers can be clicked, allowing you to sort the page by that column instead.

Sorting by a column means the view is no longer considered a standard view. You can click “Reset view” to revert to the default sorting.

Zero-value forecasts

A zero-value forecast occurs when the variant’s velocity (sales divided by sellable days in the period) is calculated as being lower than 0.0049 sales/day. This velocity represents a total of 0.15 units sold per 30 days, or 1 unit sold per 7 months.

There are three ways this can occur:

  • Zero sales were made in the lookback period, or there was a very low sales rate, equivalent to under 1 sale every 6 months

  • A new variant has just been launched, which has not yet had any sales

  • There were a high number of returns in the lookback period compared to the number of sales. If this is the case, expanding the lookback period will resolve the issue in most cases.

If your forecast is calculated as 0, you won’t be able to adjust it, as a percentage adjustment of zero is still zero.

Handling a zero-value forecast

If forecasting based on sales history is not appropriate for a variant, you can still create purchase orders using Inventory Planner Essentials, and simply adjust the quantity on the purchase order based on your alternative planning factors.

If the zero-value forecast is due to a very low sales velocity, you could use a very high percentage adjustment to achieve a target forecast number for a particular month, but it is not advised. If the velocity then changes to a higher value, you will risk over-ordering if you do not amend your adjustment in turn. Instead, you should monitor these low-velocity items and create purchase orders manually until the velocity is more stable.

You can monitor the very low velocity items by using the “All replenishable” view in Forecast and sorting by the “Velocity” column.

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