Understock situations can lead to lost sales opportunities and is one of the critical measures to have a look at as a store owner.
In this article, we will look at the different levels of Lost Sales, by Category and by Product and also explain how the calculation is made. We will also discuss the different parameters that have an impact on the calculation.
Lost Sales by Category
On the homepage, you will find two reports in the section Leaderboards – one for Lost Sales in Units and Value by Category (1) and one for Lost Sales by Product. (2)
The Potential Lost Sales by Category is the Sum of Potential Lost Sales by Product in Units.
The potential Lost Sales by Category in Value is the Sum of all Lost Sales in Value by Product for this Category.
Lost Sales by Product
For each item in the store, we calculate the potential Lost Sales by looking at:
- Sales Forecast for the product;
- Weeks of Stock set for the product;
- Lead Time for the product / product’s supplier
- The sum of incoming stock and stock on hand. (current stock)
If there is a shortage of stock for the selected period and the sales forecast is positive, we consider this as a potential lost sales.
For example, the Lost Sales in Units for ‘Briefcase Inga Green’ (3) is 7 units based on a Weeks of Stock of 8 Weeks, a Sales Forecast for this item during this period, the current stock on hand and any incoming stock (in this example, there is no incoming stock and no stock on hand)
As shown above (5) there is also an order proposal for this item in the Replenishment Report.