Summary
This article walks through how an item is classified as having a sporadic usage pattern.
Applies To
All items in StockIQ
Process
When classifying the Usage Pattern of an item, one of the possible results is that the item will be classified as Sporadic.
To determine if an item is truly sporadic, and not just slow, or conversely, recurring with a few periods of zero demand, StockIQ runs several tests against the item.
Some initial tests are run:
- First, the item must have at least 1 year of history.
- As well, it must not be identified as New, Slow or Dead based on the criteria in your Inventory Limits settings.
- Finally, a Recency check is run to see if the item used to be sporadic but is no longer, to make sure the item hasn't had a recent change in behavior, such as items that are introduced and then mature into regular demand.
Once these conditions are met, three tests are run against the item's demand history to determine if it is Recurring or Sporadic. Threshold values used by these tests are in the Global Inventory Limits screen, and are described in more detail in that topic.
- Croston's Weighted Average Demand Interval - This approach uses Croston's approach to measuring average demand interval, which is an alpha weighted average including the effects of the number of consecutive non-zero periods. This is a relatively involved look at figuring out how frequently the item is sold, and thus, to figure out of it is sporadic or not.
- Simple Average Demand Interval - This is a simpler approach that simply takes the average demand interval, e.g. the length of time between sales
- Percentage of Zero Periods - A third check is simply the percentage of periods that are zero for the item. When there is a large percentage of zero periods, the item is more likely to be what we would call sporadic.
If any two of these methods identify the item as sporadic, then the item is classified with the Sporadic Usage Pattern. Otherwise, it is identified as Recurring.