Advanced Demand Forecasting System to Enhance Inventory Optimization and Sales Performance

The client relies on generic demand forecasting solutions that yield limited accuracy (~30%), leading to overstocking, reduced shelf availability (around 50%), increased days sales of inventory (average 27 days), and diminished sales performance. These issues hinder revenue growth and expansion plans, including opening new store locations.

A mid-sized retail chain with a large assortment of SKUs across multiple locations seeks to improve demand accuracy and inventory turnover.

• Achieve demand forecast accuracy of at least 90%.
• Reduce days sales of inventory from approximately 27 days to under 20 days.
• Enhance on-shelf product availability to at least 75%.
• Increase overall revenue and support the opening of new stores within a 6-month rollout period.

• AI-based demand prediction models leveraging machine learning and big data analytics.
• Real-time analytics modules for monitoring days sales of inventory and sales trends.
• Dashboard visualization of forecast accuracy, inventory levels, and on-shelf availability.
• Automated alerts and recommendations for stock replenishment based on predictive insights.
• Integration with existing merchandise management and point-of-sale systems.
• User-friendly UI for inventory managers to review forecasts and adjust parameters.

• Merchandise management system
• Point-of-sale (POS) systems
• Inventory and logistics management platforms
• Data sources for market and sales analytics

• System scalability to support hundreds of SKU forecasts simultaneously
• High forecast accuracy (target ≥90%) to enable reliable decision-making
• System response time of under 2 seconds for analytics queries
• Data security and privacy compliance, ensuring secure handling of sales and inventory data
• Availability and fault tolerance for 24/7 operational support

Implementation of the advanced demand forecasting system is expected to increase forecast accuracy to 90%, reduce inventory days from 27 to under 20, improve on-shelf availability to at least 75%, boost sales and revenue, and facilitate the successful expansion of retail stores within six months, ultimately enhancing overall operational efficiency and customer satisfaction.