All examples for Demand Forecasting & Inventory Optimization

Growing Product with Strong Trend Analysis

Inventory optimization for Widget-X showing 95% year-over-year growth with 9 months of data. Demonstrates trend detection with high R² confidence, current inventory risk assessment (180 units on hand), and proactive ordering recommendations for continued growth trajectory.

Input

What you provide to the skill

Analyze Widget-X inventory - 9 months: Apr:120, May:135, Jun:148, Jul:162, Aug:175, Sep:190, Oct:205, Nov:218, Dec:232. Lead time 2 weeks, currently have 180 units on hand.

Output

What the skill generates for you

Demand Forecast & Inventory Optimization: Widget-X

Historical Performance (9 Months: Apr-Dec 2024)

  • Total Units Sold: 1585 units
  • Average Monthly Sales: 176.1 units/month
  • Standard Deviation: 38.3 units
  • Range: 120 - 232 units
  • Coefficient of Variation: 21.7%
  • Demand Pattern: MODERATE variability

Trend Analysis

  • Direction: GROWING (upward trend)
  • Monthly Growth: +14.0 units/month
  • Year-over-Year Growth Rate: +95.3%
  • Trend Confidence (R²): 1.000
  • Assessment: Strong consistent growth trend detected

Seasonality Assessment

  • Pattern: No seasonal pattern detected with 9 months of data
  • Note: Limited data (9 months) - insufficient for reliable seasonal analysis
  • Recommendation: Re-analyze after reaching 12+ months to detect potential seasonality

Demand Forecast - Next 3 Months (Jan-Mar 2025)

January 2025

  • Point Forecast: 246 units
  • 80% Confidence Interval: 245 - 247 units
  • 95% Confidence Interval: 245 - 247 units
  • Interpretation: Continued growth expected (+39.7% vs historical average)

February 2025

  • Point Forecast: 260 units
  • 80% Confidence Interval: 259 - 261 units
  • 95% Confidence Interval: 259 - 261 units
  • Interpretation: Continued growth expected (+47.6% vs historical average)

March 2025

  • Point Forecast: 274 units
  • 80% Confidence Interval: 273 - 275 units
  • 95% Confidence Interval: 273 - 275 units
  • Interpretation: Continued growth expected (+55.6% vs historical average)

April 2025 Outlook

  • Expected Demand: ~288 units
  • Note: Plan ahead for continued growth trajectory

Inventory Recommendations

Current Inventory Status

  • On Hand: 180 units
  • Daily Demand: 5.8 units/day
  • Days of Supply: 31.1 days (~1.0 months)

Optimal Inventory Parameters

  • Service Level Target: 95%
  • Supplier Lead Time: 2 weeks (14 days)
  • Average Demand During Lead Time: 81.0 units
  • Safety Stock: 43 units
  • Reorder Point: 124 units

ACTION: When inventory reaches 124 units → place order

Suggested Order Quantity

  • Recommended Order Size: 506 - 633 units
  • Rationale: Cover ~2 months of forecasted demand plus safety stock buffer
  • Expected to last: 2-2.5 months at current growth rate

Risk Analysis

Current Stockout Risk

  • Current Inventory: 180 units
  • Optimal Reorder Point: 124 units
  • Status: ✓ Above reorder point by 56 units
  • Stockout Probability: <5% (well-protected)
  • Risk Level: LOW
  • Next Order Timing: ~10 days

Demand Uncertainty

  • Forecast Accuracy (historical MAPE): 0.2%
  • Confidence Level: High (strong linear trend)
  • Key Uncertainty: Growth rate may accelerate or decelerate

Key Insights

  1. Strong Growth Trajectory: Widget-X shows consistent monthly growth of +14.0 units/month (+95.3% YoY)
  2. Stable Demand Pattern: Low variability (CV=21.7%) makes forecasting reliable
  3. Predictable Trend: High R² (1.000) indicates strong linear trend with minimal noise
  4. Growing Market: Demand increased 93% from April (120) to December (232)
  5. Current Position: 180 units on hand = 31.1 days of supply

Recommended Actions

Immediate (This Week)

  1. Current inventory position is adequate (31.1 days of supply)
  2. Set calendar reminder to place order in ~6 days
  3. Monitor inventory - reorder when reaching 124 units

This Month (January)

  1. Expected sales: ~246 units
  2. Place replenishment order to cover January demand + safety stock
  3. Track actual vs forecast (expected: 246 units)
  4. Confirm supplier can handle 506+ unit orders reliably

Next Quarter (Feb-Apr)

  1. Expected total demand: ~780 units across Jan-Mar
  2. Plan for Q2 2025: Anticipate continued growth to ~288 units/month by April
  3. Review pricing strategy - strong demand growth may support price increases
  4. Consider negotiating better lead times or bulk discounts with supplier

Ongoing Strategic Actions

  1. Update forecast monthly: Re-run analysis with new sales data to refine predictions
  2. Monitor growth sustainability: +95.3% YoY growth - watch for market saturation signals
  3. Seasonal analysis: Re-analyze after 12 months to detect any seasonal patterns
  4. Safety stock review: Current 43 units supports 95% service level - adjust if targets change
  5. Capacity planning: If growth continues, discuss increased production capacity with supplier

Forecast Method: Holt’s Linear Trend (Exponential Smoothing)
Confidence Level: High (R² = 1.000, low variability)
Next Review: After January 2025 sales data available

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About This Skill

Analyze historical sales data to forecast demand, detect seasonal patterns, and calculate optimal inventory levels to prevent stockouts while minimizing overstock.

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