Inventory
Use Cases

Stockout Risk Calculator

No matter how much forecasting and planning businesses do, stockout risk is still a factor. Shifts in demand and buying patterns are sometimes unpredictable and must be hedged. The most common way to plan for these shifts is to make sure have enough "safety stock" in your inventory.

There are a few steps we must take to get to calculating safety stock:

  • Calculate max and mean purchases for items by month (or other preferred time frame)
  • Join metrics tables and item stock lead times
  • Calculate safety stock as *(Max usage x max lead time) – (Avg usage x Avg lead time)*
  • Subtract safety stock from inventory per item and rank to discover which products are most at risk of running out of stock

Outputs

In the chart and supporting table below we can see all of the inventory items ranked by *(inventory - safety stock).* In other words, ranked by which product is at most risk of running out of stock.

(Charts and tables are live embeds of assets produced in Cascade)

(Charts and tables are live embeds of assets produced in Cascade)