Summary
This article walks through how the 3 Daily Usage Values are calculated in the application. : Historical Daily Usage, Current Daily Usage, Forecasted Daily Usage at Lead Time.
Applies To
All items in StockIQ irrespective of if it is auto forecasted or manually forecasted
Steps
1. Determining Average Length
Low/No Seasonality Items Average Length:
Average Length = Max (Lead time, Minimum days for daily usage)
StockIQ will use the larger of the item's lead time, or the 'Minimum Days for Daily Usage' value from Global Daily Usage Settings screen.
High Seasonality Items Average Length:
When you have highly seasonal items, you want to be more responsive to changing demand, to ensure you stock up and stock down appropriately for an item that is coming in and out of season.
Average Length = Min(Lead time, Max days for daily usage)
In this case, StockIQ uses the lesser of the item's lead time or the 'Max Days for DU Highly Seasonal items' value from Global Daily Usage Settings screen.
2. Calculate Daily Usage Values
Historical Daily Usage:
This is is a backwards-looking usage from today, back the number of days chosen for the average. It is based on demand history and dependent demand history.
Current Daily Usage:
This number is forecasted usage from today, forward the number of days chosen for the average. It gives you a good overall picture of what forecasted demand looks like right now on an item. Note this is based on forecasted usage only, not current open demand orders. Forecasted usage does include uplifts or adjustments due to events of any type.
Daily Usage At Lead Time:
This is the most important usage number, since it tells you what your usage is forecasted to be at lead time of the item's primary supplier (be that a vendor, or warehouse transfer etc.), which is the period for which you are trying to do replenishment. This usage is also the one plugged in to safety stock calculations since you are ordering for lead time when you do your replenishment. Note this is based on forecasted usage only, not current open demand orders. Forecasted usage does include uplifts or adjustments due to events of any type.
*Note: All three usage types use the number of workdays from lead-time or Minimum Days for Daily Usage whichever is greatest.