Documentation

SkuBrain 101

Stock on hand

Having seen how demand affects inventory planning, now let’s assume the same forecast:

# Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Total
Forecasted sales (units) 4 5 7 3 4 6 29

However also assume that we already have 5 widgets in stock (stock on hand = 5).

In this case the amount of stock we need to order is simply the total forecasted demand less what we already have.

Requirement = total_forecated_demand - stock_on_hand
            = 29 units - 5 units
            = 24 units 

Nothing too taxing there, so let’s see how supplier lead times work.