Calculation Type: Sales Demand

Calculation concept

This calculation type differentiates between two calculation approaches:

Items without an assigned Lifecycle Curve
Items with an assigned Lifecycle Curve.

Those approaches define how the expected sales quantity until the calculation horizon is calculated.

Items without an assigned Lifecycle Curve

For these items the calculation is based on the Average Sales Quantity from the calculation start date until today.

Calculation steps:

Calculation of the Average Sales Quantity for each Item-Variant-Location combination for a defined time period (the Start Date in the Redistribution Replenishment Journal and the current date).
Calculation of number of days until end of time period (End Date in Redistribution Replenishment Journal and current date).
Calculation of Demand until End Date (Average Sales Quantity * Days until End Date).
Calculation of Effective Inventory at End Date (current Effective Inventory minus Demand until End Date).
If the Effective Inventory at End Date is negative, the location has a demand. The Redist. Demand is the needed stock to end the calculation period with zero Inventory.
If the Effective Inventory at End Date is positive, the location has a supply. The Redist. Stock is the excessive stock at the end of the calculation period.
If the location has a supply, a Buffer % is subtracted from the Resist. Stock quantity to keep a safety quantity.
After reviewing, if needed, you can overwrite the calculated Redist. Stock and Redist. Demand by manually assigning the transfer quantity per item, variant, and location in the Retail Item Variant Availability by Location page.

Items with an assigned Lifecycle Curve

For these items the calculation is based on the assigned Lifecycle Curve and the Lifecycle Starting Date.

The above chart shows an item's lifecycle. The lifecycle starts in week 4 (introduction of product) and ends in week 11. The Redistribution Replenishment Journal was run with a Journal Start Date in week 5 and an Journal End Date in week 10. The current date is in week 7. The yellow area shows the (expected) sales behavior of the item during its lifecycle - there is a slow start with an increase until week 7. Later, the sales will slowly decrease and finally, in week 10 and 11, drop significantly.

In the calculation the sold quantity is calculated within the calculation horizon (Journal Start Date until Journal End Date). The lifecycle is applied to understand, in which phase of the lifecycle the item is and what can be expect to be sold until the end of the calculation horizon (Journal End Date).

Calculation steps:

Calculation of sold quantity between Journal Start Date and current date (area B in the chart).
In the example: 50 pcs.
Calculation of the percentage share of the area B of the total Lifecycle.
In other words: the sum of the percentage shares of areas A+B+C+D is 100 %. What is the percentage share of B?
Calculation of the percentage share of the area C of the total Lifecycle.
This area represents the time from the current day until the end of the calculation horizon. This is the time that is still left to sell the item.
Calculation of Demand until End Date.
Formula: sold quantity (area B) divided by percentage share of area B multiplied by percentage share of area C.
This is the quantity that is expected to be sold until the Journal End Date, based on the lifecycle and sold quantity until today.

Click here for information on how to set up Lifecycle Curves.

After reviewing, if needed, you can overwrite the calculated Redist. Stock and Redist. Demand by manually assigning the transfer quantity per item, variant, and location in the Retail Item Variant Availability by Location page.

Note: Redist. Demand will be rounded up to the next nearest whole number, and Redist. Stock will be rounded down to the last nearest whole number, provided they have decimal value.

Setup fields on Redist. Template

Field	Description
Replenishment Type	This field specifies whether the Replenishment Template is to be used for Store Stock Redistribution, or for creating Purchase Orders or Transfer Orders. The selection Redistribution is used for Store Stock Redistribution.
Redistribution Calculation Type	This field specifies the type, how the system calculates the Redist. Stock and Redist. Demand. The available values are: Sales Demand Stock Balancing Reorder Point/Max. Inventory Manual Redistribution
Redistribution Strategy	This field specifies the strategy, how the system calculates the trips between stores with Redist. Stock and Redist. Demand. The available values are: Least No. of Trips Least Cost Shortest Distance (Direct) Shortest Distance (Route) Shortest Duration (Route) More information can be found here: Redist. Strategies.
Redistribution Warehouse Stock	This field is used for Store Stock Redistribution and defines how available stock in the Warehouse is treated. The available values are: Ignore Force Prioritize Like Store Stock More information can be found here: Warehouse in Redistribution.
Create Journal Lines	This field specifies if the Redist. Journal is calculated in one or two steps. The available values are: Create Redist. Preview Only Create Redist. Preview and Journal Lines The first option will only calculate the Redist. Preview and the user can review the results, adjust, and calculate the Journal Lines in a manual second step. The second option will calculate the Redist. Preview and Journal Lines in one step.
Redistribution Buffer Calculation	This field is used to reserve a Buffer quantity in Locations that serve as supplying Location in Store Stock Redistribution. The available Inventory in the Location is reduced by the Redistribution Buffer Value % to calculate the Redistributable Stock. The field Redistribution Buffer Calculation defines the basis for this calculation. The available values are: From Demand Until End Date The buffer stock will be calculated from the demand of the item until end date. From Current Stock The buffer stock will be calculated from the current effective inventory level of the item. From End Date Stock The buffer stock will be calculated from the remaining inventory of the item on the end date. When a new Replenishment Template of type Redistribution is created, this field is copied over to the Template from Replen. Setup.
Redistribution Buffer Value %	This field is used to reserve a Buffer quantity in Locations that serve as supplying Location in Store Stock Redistribution. The available Inventory in the Location is reduced by the Redistribution Buffer Value % to calculate the Redistributable Stock. The field Redistribution Buffer Calculation defines the basis for this calculation. When a new Replenishment Template of type Redistribution is created, this field is copied over to the Template from Replen. Setup.
Season Code	This field specifies the Season Code that will be used to filter the items considered in the calculation.
Date Calculation Type	This field specifies whether the start date and end date will be entered manually or calculated based on a given date formula.
Start Date	This field specifies the start date to be used for store stock redistribution calculation. This is the starting date to be based on when calculating sales information such as Qty. Sold until Today, Sell Through % and Average Daily Sales. It is automatically assigned with the season's starting date if a Season Code is selected. This is used when the Date Calculation Type is Date.
End Date	This field specifies the end date to be used for store stock redistribution calculation. This is the ending date to be based on when calculating sales information such as Demand until End Date. It is automatically assigned with the season's ending date if a Season Code is selected. This is used when the Date Calculation Type is Date.
Start Date Formula	This field specifies the formula to calculate the start date for store stock redistribution calculation. This is used when the Date Calculation Type is Date Formula.
End Date Formula	This field specifies the formula to calculate the end date for store stock redistribution calculation. This is used when the Date Calculation Type is Date Formula.
Stockout % Above	Stockout % defines the ratio of out-of-stock item variants to the total number of item variants from all stores. Only items with Stockout % above the value defined in this field will be considered in the calculation.
Sell Through % Above	Sell Through % defines the ratio of total sold inventory of the item as of today to its total inventory as of start date. Only items with Sell Through % above the value defined in this field will be considered in the calculation.

Filters on Redist. Template

In the Redist. Template you can set the filters you want to apply to the items considered in the calculation.

Filter	Description
Vendor No. Filter	This field specifies a filter for the Vendor No. field of the items. An example is 1000 if you only want to select items from vendor number 1000. If you enter 1000..2000 the system will select all items from vendor number 1000 to 2000.
Item Division Code	This field specifies a filter for the Division Code field of the item.
Item Category Filter	This field specifies a filter for the Item Category Code field of the item.
Item Product Group Filter	This field specifies a filter for the Product Group Code field of the item.
Item No. Filter	This field specifies a filter for the item number.
Special Group Code Filter	This field specifies a filter for Special Groups. Only items in these Special Groups will be considered in the calculation.
Item Attribute Filter	This field specifies a filter for Attributes.
Variant Dimension Filter	This field specifies a filter for Variant Dimension Values.
From Location Filter To Location Filter	This field specifies a filter for From Location and To Location. When Store Stock Redistribution calculates the inventory in the Locations, it classifies Locations into Supply Locations (=From Location Filter) and Demand Locations (=To Location Filter). This filter will set Locations to the status Excluded in Store Stock Redistribution when the Calculation Type Sales Demand is used.

Calculation result

The calculation of Redist. Preview is initiated with the Add Items to Journal/Preview action on the Redistribution Replenishment Journal page.

When the Preview is calculated, the Show Redist. Preview action opens the Redistribution Journal Preview page where you can view the calculated Redist. Demand and Redist. Stock information of the items. Click here for more information on how Redist. Preview is calculated.

From the Redist. Journal Preview, the Show Items Availability action opens the Retail Item Variant Availability by Location page. There, you view the variant availability and, together with the calculated sales factor (such as Sell Through %), you can determine how the variants can be redistributed among the stores and manually overwrite the calculated Redist. Stock and Redist. Demand, if needed.
For more information on how to manually assign Redist. Stock and Redist. Demand, see Retail Item Variant Availability by Location.

Fields on Redistribution Journal Preview

Field	Description
Item No.	This field shows the Item Number.
Exclude	Items with this check box selected will be excluded from redistribution trips calculation.
Stockout %	This field shows the ratio of out-of-stock item variants to the total number of item variants from all stores.
Sell Through %	This field shows the ratio of total sold inventory of the item as of today to its total inventory as of start date.
Sell Through % (Expected)	This field shows the expected Sell Through % based on the start date, current date, and end date, as well as the lifecycle curve, if assigned to the item.
Variant Availability %	This field shows the ratio of in-stock item variants to the total number of item variants from all stores.
Eff. Inventory	This field shows the total inventory of the item, considering also the Purchase Orders, Sales Orders, and Transfer Orders that have not been posted.
Inventory at End Date	This field shows the remaining inventory of the item on the end date.
Days until End Date	This field shows how many days are remaining from the current date until the end date.
Average Daily Sales	This field shows the calculated average daily sales of the item from the start date until the current date.
Redist. Stock	This field shows the total redistributable quantity of the item across all stores.
Redist. Demand	This field shows the total demand quantity of the item across all stores.

Redistribution buffer calculation, example

After the redistribution quantity calculation with the Sales Demand calculation type, item 10000 has the following stock and demand status in location S0001:

Effective Inventory: 280

Demand until End Date: 200

Inventory at End Date: 80

Buffer stock is a level of extra stock that is maintained to mitigate risk of stockouts. When no buffer stock is maintained, the above information shows that item 10000 has a Redist. Stock of 80 in location S0001 which can be redistributed to other locations.

If there is a Redistribution Buffer Value % defined, not all the calculated Redist. Stock will be redistributed, the percentage of inventory reserved as buffer stock will remain in the location. The table below shows the new Redist. Stock quantity for item 10000, when a Redistribution Buffer Value % of 10 % is applied on a different Redistribution Buffer Calculation type.