On what basis is the Demand Forecast calculated?

The demand forecast is the projected sales estimate, and is calculated for each sku at store level considering not just past sales, but also the product's sales opportunity (stockouts, period on display, etc.). 

A key input to calculate demand forecast is the seasonality, which is automatically calculated by Nextail.


There are many exceptional cases that require special attention:

  • Temporary stock outs- Lack of sales data: Nextail fills in the missing data using the remaining days and assigning them weight according to the seasonality.

  • Product reintroduced in the warehouse after a long period of being out of stock: this case does not have enough past data to draw up a proper forecast, so we delve deeper into the historical data until the product was available in the store and there is relevant data.