For any business, inventory is the lifeblood of business. Be it a trading company or manufacturing unit, without proper inventory management it can not run smoothly. With the advancement in technology, inventory forecasting is much simpler than ever before. With the right forecasting, you can predict the future needs of the raw materials or goods you need to have in your stock so that your business can go uninterrupted. But before moving any further you must know at least the basic of forecasting. Also, you should learn about the benefits that can be reaped by investing in good inventory forecasting software.
What is Inventory forecasting software?
Inventory forecasting can be defined as the demand planning for future needs. It can be done using past data and/or trends or based on any upcoming event or season. Based on the information available with the help of software like inventory forecasting software you can easily predict how much inventory you need to have in your stock to meet the future demand. There are different types of inventory forecasting models that are usually used by the software.
- Trend forecasting: with the help of this the user can easily predict the level of inventory needed to keep up the pace with the changing trend in the market.
- Graphical forecasting: these are simple graphs instead of mathematical calculations that make it easier for a business owner to understand the results.
- Qualitative forecasting: this involves a larger amount of data collection and based on the survey results a forecaster can gauge the level of inventory needed.
- Quantitative forecasting: with the help of numerical data available a forecaster can predict the inventory requirement with this type of forecasting model. This is by far one of the most accurate and best ways to forecast.
Benefits of using the forecasting software
Not only can it represent the level of inventory needed to maintain any business, the forecasting software can bring some benefits to the user too. Some of them are as follows:
- Cost savings: without knowing the future requirement you might need to pile up a huge amount of inventory that can block your working capital. Using the software you can predict the requirement correctly and save your money.
- Time-saving: compiling a huge amount of data and building forecasting models manually can eat up the larger part of your time, whereas using the software you can get the results in a jiffy.
- Improved ROI: when you don’t need to invest a huge amount of capital for maintaining stock, your ROI will improve.
- Supply chain management: with this kind of software you can manage your supply chain more efficciently
By using inventory forecasting software you can reap benefits like better insights about your business, minimize the chances of going out of stock, and increase customer satifaction.
