Targets, Thresholds, Forecasting

This section explains how inventory targets are calculated and how to use the forecasting screen to create purchase orders (POs).

Forecasting Screen and Purchase Orders

Access the forecasting screen via Inventory > Forecasting where you can generate POs. Choose from three modes:

1. Use System Qty for PO (Default Mode)
2. Formula: Target - Free Stock - Incoming Stock
3. When to Use: Best with stable history and unchanged settings.
4. Example: Target = 100 units, Free = 20, Incoming = 30 → PO for 50 units.
5. Use Sold Qty for PO
6. Formula: Uses the "Sold" amount from the selected date range (via date picker).
7. When to Use: Good for recent setting changes or limited history.
8. Example: 50 units sold in the last 30 days → PO for 50 units.
9. Use Sold Qty + Daily for PO
10. Formula: Sold + DailyStockout (accounts for days out of stock) in the selected date range.
11. When to Use: Ideal when a product was out of stock and sales were missed.
12. Example: 50 units sold + 10 units missed due to stockout → PO for 60 units.

How Targets Are Calculated

Targets help you decide how much stock to hold. They’re calculated based on these settings:

1. Target Stock Days: How many days of inventory you want (set at group level).
2. Look Back Days: How far back the system looks at sales history to predict needs (set at group level).
3. Lead Time Days: How long it takes to restock (set in the group editor).

Important Notes:

1. Targets update only when an inventory object changes (e.g., stock is added or sold), not when settings change.
2. To force an update after changing settings, adjust inventory (e.g., manually tweak stock levels).

Example: If Target Stock Days = 30, Look Back Days = 90, and Lead Time Days = 5, the system looks at 90 days of sales history to calculate a 30-day stock target, factoring in a 5-day restock delay.