Tools for Merchandise Forecasting

Supply Chain Perspective

Production Planning Requirements Plng. Demand Forecasting
Collaborative Planning, Forecasting & Replenishment (CPFR)

While you may participate in a CPFR effort, you also must track and forecast demand in a customer-facing way. Many forecasting tools are designed to do exactly that. Note, however, that the typical demand curve for retail, as shown in the chart “Demand by Channel” (right), is a sell-through model. Sales start off immediately upon introduction of the stock into the stores and continue (ideally) until the inventory is exhausted. A run-away bestseller may be restocked repeatedly, but the typical challenge is developing a mark-down plan that strategically lowers prices until the product sells out, while preserving as much margin as possible. Again, a whole category of price management software systems support that effort.