Resolve Alerts

Many inventory issues result from a difference in sales compared to the forecast. These issues tend to be resolved reactively with substitutions, manual inventory transfers, or markdowns. Other issues arise from unplannable factors outside of your control such as product recalls, manufacturing issues, or shipping delays or errors. Similar manual resolutions ensue.

However, several potential issues can be seen when inventory projections are made into the future. These potential issues can be resolved proactively before they manifest into an actual shortage or overstock.

  • Effectively defined alert thresholds ensure that these issues will be highlighted for you.
  • Other key items, hot buys, or new product introductions that are on your daily or weekly to-watch list may not break the alert thresholds but can follow the same analysis to adjust inventory to a more suitable level.

While each situation requires expert knowledge of the business goal, use the following recommendations to get started considering the best resolution to projected inventory issues. These recommendations may resolve a particular problem; however, the same frequently occurring inventory issue will require additional analysis of the supply chain inventory levels, supplier compliance, and potential shipping issues before resorting to a long term policy override.

  • Use the Plan View to review the forecasted sales and inventory.
  • Where an inventory issue is identified, use the Order Point (OP) and Order Up to Level (OUTL), on or just before the problem occurs, to identify when the minimum (OP) and target inventory levels (OUTL) do not align with forecast sales and desired service level.
  • When OP or OUTL requires adjusting, open the AO Panel by clicking in the cell of the review day/item/location(s) that require adjustment.
  • When an issue occurs in a large concentration of stores, the warehouse stock levels could be an issue. Consider reviewing the warehouse replenishment policies and follow the same recommendations.
Issue Replenishment Method Policy Adjustment
Out of Stock Min/Max
  • Create a Stock Level Override, set Increment % to a value greater than 1 to increase OP / OUTL to align with increased forecasted sales.
Time Supply
  • Ensure that Max Safety Stock Units/Days is not constraining OP, allowing inventory to get too low before re-ordering.
  • Create an Optimization Setting override, increase Inventory Selling Days (relative to Max Time Supply) to increase OUTL.
Dynamic
  • Ensure that Max Safety Stock Units/Days is not constraining OP, allowing inventory to get too low before re-ordering.
  • Create an Optimization Setting override, increase Inventory Selling Days to increase OUTL
Low Stock Min/Max
  • Create a Stock Level Override, set Increment % to a value greater than 1 to increase OP / OUTL to align with increased forecasted sales.
  Time Supply

Ensure that Max SafetyStockUnits/Days is not constraining OP, allowing inventory to get too low before re-ordering.

  • Optionally:
    • Create an Optimization Setting override, increase Inventory Selling Days (relative to Max Time Supply) to increase OUTL. This creates a fixed target for inventory days of supply.
    • Or create an Optimization Setting override, set Min Safety Stock Units or Days to a value that helps to carry extra stock for volatile sales or shipping delays. This allows inventory days of supply to more flexibly adjust while ensuring a minimum level of safety stock is achieved to reduce the chance of an out of stock.
  Dynamic

Ensure that Max SafetyStockUnits/Days is not constraining IP, allowing inventory to get too low before re-ordering.

  • Optionally:
    • Create an Optimization Setting override, increase Inventory Selling Days to increase OUTL. This creates a fixed target for inventory days of supply.
    • Or create an Optimization Setting override, set Min Safety Stock Units or Days to a value that helps to carry extra stock for volatile sales or shipping delays. This allows inventory days of supply to more flexibly adjust while ensuring a minimum level of safety stock is achieved to reduce the chance of an out of stock.
  • In rare cases, create a Service Level override to increase Service Level for key in-stock periods (for example, holiday)
Overstock Min/Max
  • Create a StockLevelOverride, set Increment % to a value less than 1 to decrease OP / OUTL to align with a slow period of forecastedsales.
  Time Supply
  • Ensure that Min SafetyStockUnits/Days is not increasing OP undesirably.
  • Optionally:
    • Create an Optimization Setting override, decrease Inventory Selling Days (relative to Min Time Supply) to decrease OUTL. This creates a fixed target for inventory days of supply.
    • Or create an Optimization Setting override, set Max Safety Stock Units or Days to a value that helps limit the ordering frequency by helping to limit OP.
  Dynamic
  • Ensure that Min SafetyStockUnits/Days is not increasing OP undesirably.
  • Optionally:
    • Create an Optimization Setting override, decrease Inventory Selling Days to decrease OUTL. This creates a fixed target for inventory days of supply.
    • Or create an Optimization Setting override, set Max Safety Stock Units or Days to a value that helps limit the ordering frequency by helping to limit OP.
  • In rare cases, or nearing end of life, create a Service Level override to decrease Service Level. This will reduce inventory but could increase risk of out of stocks if actual sales increase.