Step 0. Introduction: Sales and demand forecasting algorithm
All you need to know to start with a Sales and demand forecasting
This algorithm is using the Sales Forecasting algorithm as a base for predictions and it is allowing to users to predict how many products will be sold in the selected period. Actionable outputs of this algorithm are indicating what is the current level of your stock and if you need to purchase or manufacture more items to satisfy future customer demand or if you are way over with stored on-hand quantities. Apart from sales forecasting, iERP studio is providing purchase and manufacturing recommendations, sales business intelligence, and more features like new product forecasting or market intelligence.
This algorithm is running solely on a local computer or server and none of the data is stored on the cloud. We can also deploy customer-specific Virtual Machine and therefore eliminate customer need for hardware.
Notes:
- Artificial intelligence is used to recommend relevant reorder quantities however users are still in full control of procurement or manufacturing activities.
Business Challenges
As a small or large company, manufacturer or distributor and selling online or in the stores, inventory demand forecasting software is the key that will give you clear and actionable predictions using an AI-based sales forecast. This can be used to improve company cash flow by decreasing excess inventory levels. The demand forecasting platform also helps business to improve supply chain efficiency by forecasting sales and reorder quantities so the company can serve all customers without any delay and without the need to boost marketing campaigns to cover excess stock.
Did you know that accurate sales forecasting can help businesses to reduce their on-hand stock by 30% and simultaneously increase revenue due to stock availability by up to 8%? So if the company’s yearly revenue is €10M and the product stock value is €2M, the company can increase revenue by about €800k while reducing their capital locked up in inventory by €600k per year.
iERP Solution
Simple to use sales prediction platform for business users, continuously self-learning with automatic selection of most accurate forecasting method based on data quality and without need to have any knowledge of AI or data science. Automatic plugin of external indicators like weather, economic indicators or COVID-19 business risk are further improving the accuracy of the forecast. Users are also able t identify their internal indicators in CSV files, for example, strikes, holidays, or promotions. Actionable results can be reviewed in the application, export in excel files or reviewed directly in ERP/CRM system.
- Sales forecasting on a monthly, weekly or daily basis with external indicator considerations (weather, economic indicators, COVID-19 business risk factor).
- Automatic selection engine is picking from over 100+ algorithms when generating predictions based on the best accuracy of training/testing results..
- Sales vs. realistic forecast prediction based on committed purchase and work orders.
- Market intelligence feature supporting the adjustment of the forecast based on internal market intelligence information.
- Product like functionality allows users to associate new products with existing products and generate suggestions for brand new products in the portfolio.
- Built-in business intelligence, exporting results in Excel spreadsheets or reviewing results with API integration in an ERP/CRM system.
Algorithm Benefits
- Increase your sales forecast accuracy with simple-to-use AI-powered software, and by utilising additional parameters like COVID-19, weather and economic indicators.
- Reduce the costs of unsold goods by precise planning of production.
- Prepare more precise budgets and sales forecasts.
- Develop your pricing and promotions strategy using on-demand data.
- Eliminate human bias and establish consistent AI-based sales forecasting methodology.
- Short implementation time in days