What is daily sales rate:
Daily sales rate is a calculated value of average units sold per day for a given period. For example, if 90 units are sold in a 30-day period, the average daily sales rate for 30 days would be 90/30=3 units/day. Daily sales rate is a feature to enhance your purchasing recommendations in addition to our forecast recommendation.
Where to find daily sales rate calculations:
Daily sales rate calculations are found in a column called "Daily Sales Rate Recommendation" in the Purchasing section. You will see two recommendations in this column, one based on the item's forecast alone and a daily sales rate recommendation.
The difference between Forecast Recommended Qty and Daily Sales Rate Recommendation:
Forecast Recommended Qty is the amount ForecastRx recommends you order based on the forecasting models + safety stock. This recommendation is best used for products that are highly seasonal and products with a sales history of 2+ years. The forecast takes into account an item's sales history and trends to provide an accurate forecast for future sales.
Daily Sales Rate Recommendation is the amount suggested you order based on average sales over previous periods. Daily sales rate can also use a hybrid approach, where the recommendation is based on a blend of average sales over previous periods and the forecast recommendation. This recommendation is best for items with under 2 years of sales history and items that have fluctuations in sales velocity. Daily sales rate recommendation reacts quicker to recent trends in sales compared to the Forecast Recommended Qty.
*Note: The Purchase Qty column is based on the Forecast Recommended Qty. Purchase Qty is the Forecast Recommended Qty rounded by MOQ and number of units per case pack.
*Note: The Forecast Recommended Qty may differ greatly from your Daily Sales Rate Recommendation because of safety stock. To add safety stock to your Daily Sales Rate Recommendation, add Additional Inventory (in additional days of stock) under the Manage Company > Company Details section as an account-wide setting or adjust per SKU or supplier under the Suppliers or Items tabs.
Where to find daily sales rate settings:
Daily sales rate, similar to lead time and order interval, can be set on company, supplier, or item level. Company-level settings are found in Company Details, supplier-level settings are under Suppliers, and item-level settings are under Items. ForecastRx will provide a custom recommendation for setting your average weightings that will be selected by default. You have the ability to change these settings at any time.
The Additional Inventory (safety stock) setting will also be in the same locations as the Daily Sale Rate Rules. Daily Sales Rate Recommendations are calculated using the same sales horizon (lead time + order interval) as the Forecast Recommended Qty. Forecast Recommended Qty adds a safety stock based on Service Level, while Daily Sales Rate Recommendations add safety stock using additional days of inventory.
Daily sales rate rules - average vs. automatically adjusted weightings:
Average: You will distribute percentage weights to each category for a total of 100%. Each category is a look back time frame from which your average daily sales rate will be calculated. In addition, you can assign a weight to the ForecastRx Demand. ForecastRx Demand will calculate a daily sales rate based on our forecast models shown in the Item Card.
Automatic Daily Sales Rate Settings (recommended): Your daily sales rate rules will be automatically set to predetermined weights based on your items' sales history. This is because your forecast holds more value when it has more sales history to analyze. Our proprietary forecasting models are what make ForecastRx more unique and intelligent than other forecasting tools, as well as provide the most insight for spotting seasonality and trends compared to just using average daily sales rates.
For example, suppose an item has over 2 years of sales history. In that case, the automatic weight placed on ForecastRx Demand will be around 70% because the forecast has enough sales history to accurately predict future sales.
If an item has just over 1 year of sales history, around 20% weight will be placed on ForecastRx Demand because one complete year of history is helpful in identifying possible seasonality and trends.
Any items with less than 1 year of sales history have not completed a full sales cycle to identify trends that have not occurred yet and it is more reliable to use daily sales rate settings to pick up on sales trends.
*Note: You can reallocate your daily sales rate weights at any time you choose to.
If you would like to schedule a meeting with a member of our team—let us know, we are here to help!