Quick Summary: Forecast risk tracks the likelihood of under-forecasting while offset measures the direction and magnitude of bias. These metrics directly influence the Safety Stock panel calculations to protect inventory against uncertainty.
Where to View Forecast Risk and Offset
On an item’s Enquiry > Safety Stock panel, you’ll find both forecast risk (%) and risk offset days.
These values show how forecast accuracy influences safety stock calculations, ensuring that replenishment recommendations are adjusted for real-world demand volatility.
What Is Forecast Risk?
Forecast risk measures the variance between forecast history and sales history, but it only considers the periods where the forecast was lower than sales (under-forecasting). These are the situations that create stockout risk.
When forecasts are consistently lower than sales, the forecast risk percentage increases.
The higher the forecast risk percentage, the more safety stock the system adds to protect against future shortfalls.
Example: If an item has been under-forecasted in several months and sales exceeded forecasts by 10–15% each time, Netstock will reflect this pattern in a higher forecast risk percentage, which increases safety stock.
What Is Risk Days Offset?
Risk offset days is the difference between historical forecasts and actual sales.
A positive offset means the item has been under-forecasted (sales > forecast), so days are added to safety stock.
A negative offset means the item has been over-forecasted (forecast > sales), so days are removed from safety stock.
Future Weight and Offset Adjustments
The Future Weight setting modifies how much the current forecast influences the offset:
A higher setting (closer to 2) reduces offset days when current forecasts already include safety stock.
A lower setting (closer to 0) allows offset to reflect full historical variance.
This prevents excessive safety stock buildup when forecasts already account for future demand.
➜ For more on this topic, read: Forecast - Risk defaults - Future weight
How Forecast Risk and Offset Are Calculated
Both metrics originate from the Forecast History tab, where historical forecasts are compared with actual sales.
➜ For more on this topic, read: Forecast History and Shots Explained
Risk Limits and Defaults
Risk limits and risk defaults are found under Settings > Configuration > Forecast tab
Risk limits cap the maximum and minimum values allowed for forecast risk and offset. This ensures that extreme calculations do not inflate or reduce safety stock beyond sensible ranges.
Risk defaults apply to items with less than six months of history (including upstream demand), ensuring a sensible starting point.
⚠️ Watchout: These are global configuration settings and require the appropriate access level to view and amend.
⚠️ Watchouts
Measurement Focus: Forecast risk percentages reflect only under-forecasting. Over-forecasting appears as negative offset days instead.
Configuration Impact: A high Future Weight setting may reduce the offset’s influence on safety stock. Check this setting if offset values seem unexpectedly low.
Data Threshold: Items with fewer than six months of history use default risk and offset values, which may not represent their true demand variability.
💡 Tips
Interpret the Direction: A positive offset indicates under-forecasting and adds safety stock, while a negative offset indicates over-forecasting and reduces safety stock.
Validate High-Risk Items: Review items with elevated forecast risk percentages to confirm that the extra safety stock is justified or can be minimized through forecast refinement.
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