Why is supply week important?

Weeks of Supply It shows you where you have been but not where you are going. This is especially important for those businesses and time periods that have huge sales increases. The retailer must always take into account the time period when using this method.

What is SSR in retail?

Stock to Sales Ratio (SSR) is the most appropriate method for high level, top down inventory plans and other inventory plans that do not contain the week level of time. SSR forecasts the appropriate inventory level required to support projected sales. SSR is a leading retail industry planning measure.

What is Days of supply in inventory?

This measure projects the amount of inventory (stock) expressed in days of sales. It is calculated as: [the average value of inventory at standard cost] / [annual cost of goods sold (COGS) / 365].

What is a good weeks of supply?

A general good rule of thumb is to carry the week equivalent of your monthly lead time. In the case above, 6 weeks of supply will adequately cover existing demand as well as a decent level of volatility. WOS should be adjusted by product to optimize your inventory position.

What is the week of supply?

Weeks of supply, or WOS, is a measurement for safety stock as it relates to your future demand. WOS acts as a metric to value the life of inventory on hand in weeks. In other words, how many weeks it will take for an item to sell out based on current on hand inventory and future projected weekly sales.

What is meant by bullwhip effect?

The bullwhip effect (also known as the Forrester effect) is defined as the demand distortion that travels upstream in the supply chain from the retailer through to the wholesaler and manufacturer due to the variance of orders which may be larger than that of sales.

What is STS ratio?

Stock/Sales Ratio = Monthly Stock $ ÷ Monthly Sales $ A quick turnover usually indicates a higher sales volume and a greater profit on dollars invested in inventory.

What is the days of supply?

It measures how long the inventory on hand will last. If, for example, a manufacturer consumes 100 units a day of a certain component in manufacturing and has 800 units on hand, it has an eight-day supply.

What does days of supply tell you?

In simple terms, Days of Supply refers to how many days it will take for the stock on the shelf to run out if sales continue at the same rate as recent sales – often evaluated against a 30, 60 or 90-day time frame. So, for these 100 items in your inventory, the DOS equals 120 days.

What does a high weeks of supply mean?

How is the weeks of supply measure calculated?

Weeks of Supply (WOS) is an inventory measure calculated by dividing current inventory by average sales. WOS helps to educate a planner to think of inventory in terms of time. To illustrate: Weeks of Supply is an uncomplicated calculation, taking the inventory position for a period (i.e., month) and dividing it by the average sales for the period.

What’s the difference between weeks of supply and WOs?

Weeks of Supply is an uncomplicated calculation, taking the inventory position for a period (i.e., month) and dividing it by the average sales for the period. WOS requires no complex behavior for exhausted sales, since the measure looks at past trend versus future sales projection.

What does it mean to have days of supply?

Inventory Days of Supply = Average Total Inventories / Cost of Goods Sold No organization wants to keep more inventory as holding inventory involves cost. Knowing Inventory Days of supply can help you in placing orders timely to prevent getting short on inventory at the same time keeping costs in check.

What do you need to know about supply analysis?

What is Supply Analysis? Supply Analysis is a research and analysis done to understand the supply trends and responses to changing market and production variables. Supply Analysis takes into account the production costs, raw material costs, technology, labour wages etc.