Sales Requirements

The amount of stock required can be estimated as a factor of the average monthly sales. Acumen maintains an average monthly sales figure for each product at each branch. This figure is updated each month by incorporating that months sales into the average using the technique selected for that product group. By default this technique uses a 1:1 weighting (ie. Average plus Month sales all divided by two), however the weighting may be adjusted along with a maximum percentage of change and a seasonal adjustment as controlled by the Product Group screen. During the month a working average is calculated. This working average differs from the average sales only where the month to date sales are greater than the average sales. In this case the working average is calculated as a new average between the current month to date sales and the original Average Sales with 1:1 weighting. Thus when a month of exceptional sales occurs the working average is calculated as:

$$Working\ Average = (Average\ Sales + Month\ Sales) / 2\ [Where\ Month\ Sales > Average]$$

The stock required is then calculated as a number of months at this working average. You can set the Optimum and Maximum stocklevels that you wish to hold for each product at each branch. Maximum stock levels are used to control overstocks as described later.

Optimum stock level is the level of stock that you wish to have on the shelf immediately after a stock delivery. This level is expressed in months of average sales. Thus an optimum stock level of three means that you desire stock adequate to supply three months worth of sales.

The sales requirement can now be calculated as being the working average sales per month multiplied by the optimum months of stock. In formulae form this appears as:

$$Sales\ Requirement = Working\ Average * Optimum\ Months$$