Navigate to: Settings > Configuration > Forecast
Definition
Definition
When the forecast risk for an item cannot be determined, it will receive these offset days.
This value influences Safety Stock, so increasing it will increase safety stock for those items. Making it negative will decrease safety stock for those items.
Use case
Use case
When using these parameters, it is important to determine whether the business has a bias toward over-forecasting or under-forecasting, and whether accumulating excess stock or stocking out will be more detrimental.
Typically, a default risk of 50% works well. However:
If the business struggles with high stockholding and wants to reduce calculated safety stock, a lower percentage may be appropriate.
If the main problem is achieving the target fill rate, a higher default may be better.
It is generally best to leave the Default Offset Days set to 0. If there is a consistent bias toward under- or over-forecasting on newer items, it is preferable to correct the issue at the source by adjusting the forecast itself.
FAQs
FAQs
Question: When would the default risk and default offset be required? Why would I have a case where the risk or offset cannot be determined?
Answer: These parameters are applied when the item at the location has less than 7 months of sales history.
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