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Tag Archives: Seasonal Indexes

Data Profits Makes Managing Seasonal Demand Easier in 2016ATLANTA, August 16, 2016 – At this critical time of year, retailers rely on seasonal merchandise to reach their Fall sales goals. Retailers are also deep into planning and buying for Halloween and Christmas goods for 2016. To help retailers assess their 2016 performance and get a jump on 2017, Data Profits is offering retailers their new “Seasonality Tool Kit” as a free download. The kit includes a seasonal index calculator and Data Profits’ best demand forecasting advice as well as other useful information for optimizing inventory during peak seasons.

“With retailers starting pre-Thanksgiving sales earlier and consumers pushing their online shopping into Cyber Week, seasonal selling patterns are changing rapidly,” says Stuart Dunkin, CEO of Data Profits. “Unfortunately, many retailers are relying on legacy systems that cannot react quickly enough to maintain service levels.”

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Is Your Demand Forecasting Solution Actually Leading to Profits?

A seasonal index, or seasonal multiplier, is a figure that is used to adjust a demand forecast, either raising it or lowering it for a period of time. The result of the calculation (product base forecast x seasonal index) can be used to determine the inventory needed to support sales during that period of time. A holiday like Memorial Day, a season like spring, or an event like the Super Bowl is often better serviced by applying a seasonal index across the year.
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6-Seasonal-Index-Mistakes-You-Dont-Want-to-MakeWe all know snow shovels aren’t going to sell in the summer and beach towels will flop in December. Most of us can identify general seasonality and spot a really bad seasonal index by applying simple common sense. But do you frontload your key seasons or reduce orders because your Replenishment System doesn’t quite get the job done? You might be running into these common seasonality issues that cause retailers big headaches. The irony of seasonal index errors is they are one of the few things where an Excel file can actually solve the problem; yes shocking, we all thought Excel was a report tool.

The key point to remember – a seasonal index is just a multiplier to run against the base forecast. Some software solutions will lose you with a discussion using words like multiplicative and additive. While the discussion has merit, these terms only describe seasonality math, not how it needs to be applied in replenishment or even what numbers are needed in the seasonal index math. A seasonal index is multiplicative and a market force is additive against the base forecast…but then I have gotten ahead of myself.
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LeadTime and Seasonality: Top 5 Replenishment Blogs of Summer

Hottest Summer Topics of 2013: LeadTime and Seasonality

LeadTime, Lead Time Forecasting and Seasonality /Market Trends are the top interest blogs (stories) from Summer 2013. Based on the number of blog viewers and average time each viewer spent on each page, the following five blogs are 3-1 favorites from Summer 2013. These blogs indicate the key areas that companies want to improve going into the key fall sales season in 2013.

LeadTime and Lead Time Forecasting Do’s and Don’ts

LeadTime and Lead Time Forecasting (LT) are critical in the supply chain today. Tracking lead time variance and vendor fill rates may make a nice report; but reports don’t help you manage product service levels. We have customers who grew their gross margin over a million dollars from implementing our Lead Time Forecasting module; the ROI from effective Lead Time Forecasting is huge. While knowing when lead times change is important, most of you agree that how you use your lead time variance and fill rate (you are tracking lead time variance and fill rates right?) to improve your product/location service attained is the real goal in your supply chain

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You Can Laugh At Holiday Sales Worries--If You Follow This Simple PlanThe dog days of summer may seem too early for retailers to look at their seasonal indexes for holiday season planning; but consider this, 32% of e-commerce sales in 2012 were generated between October and December. Since this is the season that can make or break your results for the year, Omni-Channel Holiday planning can’t start soon enough.  Retailers must prepare their Seasonal Index strategies now to be ready for the most important shopping period, the Holiday Season.

Do Your 2013 Holiday Sales Plans include the Dramatic Fiscal Week Changes?

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Seasonal Indexes Serve Up Lost Sales and Low ServiceSeasonal Indexes are a great tool that can be easily used to manage inventory and improve replenishment, allocations and new product releases. Seasonal Indexes used correctly result in sales growth and fewer out-of-stocks. Hello,Captain Obvious. The unfortunate truth is many of you fail to use seasonal indexes where you should today. The small group that does use seasonal indexes often fails to adjust the indexes when calendar events happen in different business fiscal weeks this year compared to the year the index was created. Last, Seasonal Indexes fail when you use the wrong math formula to create the seasonal index or you or your software use the wrong demand sales data to build the seasonal index. The results from these issues are out-of-stocks, lost sales and mis-spent inventory dollars. Read More

Seasonal Index Lessons from History

Reviewing Seasonal Indexes is critical for an accurate demand forecast. Seasonal Indexes, also called seasonal multipliers, are used to adjust the demand forecast by multiplying the product base forecast by a multiplier. The effect will raise or lower the demand forecast for the time period, often a week or month. The results are often used to help calculate the inventory needed to support sales. Holidays like Easter, seasons like springtime, and events like the Super Bowl that repeat based on some factor of time are frequently better serviced with a seasonal index applied across the year.

Problems with Seasonality

The problem with seasonality is that it can change each year, and your current fiscal year may not map back to your seasonal index. Sales from the last seasonal event may impact your base demand forecast to create inaccuracy. Easter is in a different month and fiscal week this year. How did you account for the differences when purchasing Easter inventory for this year? Next year, Easter is again in a different month and will be several weeks different from this year. Thanksgiving is a holiday that based on the time of year can add or subtract a whole weekend of December holiday shopping. There are two issues that need to be reviewed and adjusted: the current year fiscal week seasonal index values and the base demand forecast. Read More