Glossary

Learn the lingo

There's a lot to learn if you're new to this. We're here to help out with some basic terms that might help you on your planning journey.

A

ABC Analysis

A method used to categorize inventory items based on their value and importance. Typically, items are classified into categories such as A (high-value, high-priority), B (medium-value, medium-priority), and C (low-value, low-priority). ABC analysis helps businesses prioritize inventory management efforts and allocate resources effectively.

D

Demand forecasting

The process of estimating future customer demand for products or services based on historical data, market trends, and other relevant factors. Accurate demand forecasting helps businesses optimize inventory levels and improve supply chain efficiency.

R

Reorder Point

The inventory level at which a new order should be placed to replenish stock before it runs out. Determining the reorder point involves considering factors such as lead time, demand variability, and desired service levels.

S

Safety Stock

Additional inventory maintained above the expected demand level to buffer against uncertainties such as supplier delays, unexpected spikes in demand, or variability in lead times. Safety stock helps prevent stockouts and ensures a smoother supply chain operation.