Quick Summary: Planning for stocked items requires forecasting future demand across Sales, Distribution, and BOM streams. The app totals these streams to drive order calculations and convert lead time, safety stock, and replenishment cycles into units.
Why Demand Streams Matter for Stocked Items
A reliable recommended order depends on a reliable forecast, and that forecast must reflect all sources of demand for the item.
The combined forecast converts lead time, safety stock, and replenishment cycle from days into units, so policies translate into the right quantities.
The Three Demand Streams
Sales Forecast (Direct Sales Demand)
A Sales forecast applies when the item sells from the location in its own right.
Example: Umbrellas sell directly from Warehouse ABC, so Warehouse ABC holds a Sales forecast for umbrellas that reflects what is projected to sell at that warehouse.
Distribution Forecast (DC Demand)
A Distribution forecast applies when the location supplies branches or dependent locations.
The distribution demand is the required supply for each branch, not the branch’s sales forecast itself.
Example: Warehouse ABC supplies Store PQR and Store XYZ. The Distribution forecast at ABC reflects what those stores need from ABC (their required stock), not their end-customer sales forecasts.
BOM Forecast (BOM Demand)
A BOM forecast applies when the item is a component in a finished good or sub-assembly.
The BOM forecast is the expected usage of the component in production.
Example: Standard Umbrella sells on its own from Warehouse ABC (Sales forecast) and is also a component in Fancy Pants Umbrella. The BOM forecast reflects how many Standard Umbrellas are required to manufacture the finished item.
➜ For more on this topic, read: BOM Forecasts Explained
How the App Uses These Streams in Replenishment
The app creates a forecast for each applicable stream and sums them to form the total forecast. Total demand used in orders = Sales + Distribution + BOM (for that item at that location).
The total forecast converts Lead Time (LT), Safety Stock (SS), and Replenishment Cycle (RC) from days into units across the cover-forward period (LT + SS + RC).
The same total forecast feeds the recommended order calculation, ensuring you buy to cover all expected demand sources.
⚠️ Watchouts
Distribution Forecast Meaning: A Distribution forecast at the DC reflects what branches require from the DC, not the branches’ end-customer sales forecasts. Treat it as supply requirements, not retail demand.
Multiple Streams: An item may have one, two, or all three streams. Do not assume “Sales only” unless you have confirmed there is no DC supply or BOM usage.
💡 Tips
Viewing Demand Streams: Use the Inquiry > Demand panel to see each stream separately (Sales, Distribution, BOM) and confirm that links are correct.
Maintaining Accurate Links: When a finished good changes or branches are added, verify that BOM relationships and supplying-location links are up to date so upstream demand flows through correctly.
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