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  • Sourav Kumar

Inventory Planning Mistake #1 - ❌ Incorrect DRR (Sales velocity)

Updated: May 29

Daily Run Rate (DRR) or Sales velocity is the prime factor in accurate inventory forecasting, but a common pitfall lies in overlooking the impact of out-of-stock days.

Bestsellers can untimely stock-out due to under ordering caused by incorrect DRR (Daily run rate) which is higher than considered.

Mistake - Not considering SKU out-of-stock days from DRR (Daily run rate).

Explained below with an example.

Figure 1: An example on how DRR is miscalculated that results in understocking

The DRR Challenge: Tackling Understocking

DRR, the heartbeat of inventory forecasting, determines the average daily product sales. However, omitting out-of-stock days from the equation can lead to underestimating demand, causing chronic understocking. This results in missed sales opportunities and customer dissatisfaction.

Figure 2: In-stock days DRR, Stockout days and Stocked out date on EasyReplenish Inventory Planner tab having 

The Power of Automation and Adaptation

EasyReplenish is designed with intelligence and adaptability at its core:

  •   Automated Forecasting: This tool automates DRR calculations, saving time and reducing the risk of human error.

  •    Continuous Monitoring: EasyReplenish monitors changing market dynamics and adjusts forecasts accordingly, ensuring ongoing accuracy. EasyReplenish Unveiled: The Smart Solution

Introducing EasyReplenish – your secret weapon for precise demand and purchase planning. Here's how it works:

  •     Holistic Data Integration: EasyReplenish seamlessly integrates historical sales data with out-of-stock records, crafting a comprehensive view of product movement.

  •  Accurate DRR Calculation: By factoring in out-of-stock days, EasyReplenish calculates the true DRR, aligning inventory levels with actual demand.

  •   Real-Time Insights: This tool offers real-time insights into stock turnover rates, identifying patterns, and enabling data-driven decisions.

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