3 Reasons why Sales and Inventory forecasting software fail

Most of the large & medium size manufacturing companies & retail chain stores have inventory forecasting software’s for forecasting inventory & future sales number based on past data, industry trends & economic conditions all statistical based inventory and sales forecasting models or software’s aren’t 100% accurate but have you ever thought this inventory forecasting software’s fail completely.


3 reasons for failure:

  • Negative sales – In many products based organizations sales happens during last few days of the month or year for achieving numbers. Few of these sales are called negative sales as they would be reversed back at a later date. Does your sales and inventory forecasting software accept stock reversing if yes then it failed to forecast sales accurately? So the sale happened isn’t actual sale and all forecast done for future dates in invalid due to negative sales. Do you still rely on the data?
  • Promotional offers – Does your sales and inventory forecasting software consider your organizations promotional offers while forecasting sales and inventory? If yes, what’s the base for such forecasting as each promotional offer is unique to attract more and more customers and varies depending on the sales trend, market scenario and geography?
  • Newly Launched products. All products have a specific product life cycle from a launching stage, growth stage, maturity stage and finally phase-out stage. But few products are launched which wouldn’t fall into any existing product category as they have been launched to create a new product category itself like the world cheapest car. In such new launches does your forecasting software forecast sales & inventory. If yes what’s the basis for such forecasting or does it consider competitor’s most similar products. If yes, it’s not forecasting for your product but for your competitor products. Do you really need such forecasting data?

Considering these facts under which sales and inventory forecasting softwares fail, let’s assume we would soon have sales and inventory forecasting software which forecasts up-to 99.99% accurately.  Till then we need to rely on our old forecasting software only.

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