ECONOMICS

Detailed explanation-1: -Lead time is the amount of days it takes for your vendor to fulfill your order. To avoid a stockout, you need to predict the product demand during that time. This is called lead time demand. Without this calculation, you run the risk of going out of stock on items while you are waiting for new ones.

Detailed explanation-2: -The most common formulaic methods for successful inventory forecasting are trend, graphical, qualitative and quantitative. Choose the best method based on known stocking issues, personal insights, feedback from sales, customer input, mathematical analysis and market research.

Detailed explanation-3: -The push system of inventory control involves forecasting inventory needs to meet customer demand. Companies must predict which products customers will purchase along with determining what quantity of goods will be purchased.

Detailed explanation-4: -Accurate inventory demand forecasting enables a company to hold the right amount of stock, without over or under-stocking, for optimum inventory control. Historical data trends and market knowledge of how demand can fluctuate are often used to forecast inventory demand.