When this setting is enabled, zero sales at the beginning of the history will be omitted. This often results in better forecasts.

In other words if the setting is ticked, it will only remove leading zeros that occurred more than X months ago. If the leading zeros occurred within the last X months, then the setting will not be applied, and the leading zeros will be used as part of the forecast calculation.

The app will only pick up leading zeros if the item has a ‘first transaction date’ prior to the first sale. If this is imported from the ERP as the creation date of the item, this can occur, as the item could have been created in the ERP, so that it could be ordered from the supplier, and then it only sells once the stock has arrived.

If you don’t want to remove leading zeros, turn it off.

If you want to remove any leading zeros, set it to 1 or higher.

Pro tip: The app will only pick up leading zeros if the item has a ‘first transaction date’ prior to the first sale. Most ERP systems don’t accumulate sales history for an item at a location until after the first sale, meaning for most ERP systems, the leading zeros would have already been stripped away.

Imagine a new item that had no sales during the first 6 months of launching and then picked up significantly. Its forecast is going to be really low considering all the periods with zero sales history.

Now imagine we specify that leading zeros older than 6 months should not affect the forecast:

The resultant forecast is a lot more accurate given the most recent sales history of the item.

In this app example, we can see how a setting of 12 months compares to a setting of 1 month:

Results of setting the value to 12 months

Results of setting the value to 1 month

Note how the forecast has increased by removing leading zeros older than 1 month.

Question: Why not just ignore any zero sales data points?

Answer: The reason we only remove leading zeros is because zero sales data points that occurred after the item was established should be affecting the forecast. Unless there was no stock in which case refer to the Lost sales compensation setting.

Question: What is the reason for a new item not selling immediately?

Answer: 99% of the time, it’s data related. An item could have been ranged to a location in the ERP system before it was shipped to that location. The ERP system provides the app with data indicating that the item exists at the location, but no data indicating any sales at that location. The Date_Added field in the Stock_by_Location data file needs to limit the sales data entering the app. Netstock will only pick up leading zeros if the item has a ‘first transaction date’ or ‘creation date’ prior to the first sale.

Question: Could there be other, non-data related reasons?

Answer: Maybe. One explanation is that the new item doesn’t form part of the typical range of items sold by the business. Imagine a hardware store starts selling towels. It’ll take time for that item’s sales to pick up as the typical customer visiting the hardware store didn’t have towels in mind. Re-programming the consumer brain to identify the hardware store as a supplier of towels takes time.

Another explanation is that the item was shipped to a location, arrived, and remained in the store room until the correct season. The ERP system provides the app with data indicating that the item exists at the location, but no data indicating any sales at that location. Although that borders on a data issue too.

Question: Would I always want to remove leading zeros?

Answer: Not necessarily. New items could have leading zeros purely because customers don’t want them and that needs to reflect in the forecast. Be sure to investigate the reason for leading zeros at your customer.

Question: What happens when the new item had some sales early on and nothing after that?

Answer: These are no longer “leading” zeros. They will reduce the forecast unless they were as a result of stockout and a high Lost Sales Compensation value was set.