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Glossary
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Written by Sara Jaffer
Updated over 4 months ago

Forecasting

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.

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

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).

Adjusted velocity

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

Base forecast

The forecast for the month, before adjustments.

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

Note that for the current month, the base forecast displays the velocity multiplied by the number of days remaining in the month (not the total days in the month). See “Adjusted forecast” for more information.

Lookback period

Sales and stockout 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.

Lookback periods are set per product variant.

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.

Sellable days

The number of days in the lookback period where the product variant could be sold. Sellable days are the total number of days to be considered when calculating sales velocity.

A variant can be sold if:

  • it is published, and

  • it has inventory, or “continue selling when out of stock” is enabled.

The sellable days data is taken from Shopify.

Velocity

The rate of sales, or the average sales per day over the sellable days in the chosen lookback period. Velocity is calculated by dividing sales by sellable days.

Last 7 days velocity

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.

Purchasing

Days of stock

The days of stock is the period of time for which you’d like to have enough stock without having to reorder, measured in days – in other words, the stock cover. For example, if you want to hold enough stock for four weeks, the days of stock would be 28 days.

When you set the days of stock, the start and end date are displayed. The start date corresponds to the end date of the lead time.

Inventory

The amount of inventory you have available to sell, as synced from Shopify.

Forecast (Purchase screen)

The adjusted forecast for the days of stock period, calculated using the adjusted velocity from the Forecast relevant to each month in the period.

For example, if the days of stock period runs from June 16th to July 15th, and the velocity for June is 1 unit/day while the velocity for July is 2 units/day, the forecast field on the Purchase screen would display a figure of 45 (1 unit/day × 15 days + 2 units/day × 15 days).

Lead time

The lead time is the amount of time that you expect to elapse between placing a purchase order and receiving products, measured in days. For example, if you place a purchase order for a specific product on January 1st and expect to receive it by January 15th, the lead time for that product is 14 days.

When you set the lead time, the start and end date are displayed.

Minimum order quantity (MOQ)

The minimum order quantity.

Your vendor may require you to specify a minimum number of units when placing purchase orders. The MOQ for the vendor you’re filtering by is displayed on the Purchase screen. If the requirement is lower than the minimum order quantity, Inventory Planner will scale the quantity to meet it.

On order

The number of units on active purchase orders which have been ordered, but haven’t yet been received.

Hovering over the i icon reveals a list of the purchase orders containing the on order variants, with the purchase order reference #s, the expected dates, the received/ordered quantities and the remaining number of units.

Purchase date

The last date to place an order to avoid running out of inventory. If you are already out of inventory, the purchase date is today’s date.

If the purchase recommendation is zero, you’ll see a metric in the form of “x days until losing $x/day” instead.

Requirement

The number of units needed to meet demand during the planning period (today + lead time + days of stock), based on the adjusted forecast for the period, less current inventory and on order quantities expected during the planning period.

Requirement profit

The required units multiplied by the profit per unit – i.e. the projected profit, based on Shopify’s retail and cost prices, for the units to be reordered.

To order

The purchase recommendation adjusted to meet the variant’s minimum order quantity.

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