How is recommended inventory replenishment calculated?

Recommended inventory replenishment estimates how many additional units may be needed to reach the configured stock-cover target while allowing for demand during the supplier lead time.

What information is used?

The recommendation considers:

• Current usable inventory
• Forecast weighted daily sales
• Current days cover
• Target days cover
• Supplier order lead time
• Relevant inventory already inbound or in transit

Step 1: Close the target-cover gap

MerchantSpring first estimates the additional inventory needed to move from the current days cover to the configured target.

The simplified calculation is:

Target-cover requirement = forecast daily sales × (target days cover − current days cover)

For example, if a product has:

• Current cover: 30 days
• Target cover: 90 days
• Forecast sales: 1.7 units per day

The target gap is 60 days:

60 days × 1.7 units = approximately 102 additional units

Step 2: Allow for demand during the lead time

The calculation must also consider units expected to sell while the new stock is being produced, shipped and received.

The simplified calculation is:

Lead-time demand = forecast daily sales × supplier lead time

If the supplier lead time is 30 days:

30 days × 1.7 units = approximately 51 units

This demand is included because existing stock will continue to sell while the replenishment order is in transit.

Simplified replenishment example:

Using the figures above:

Component	Approximate quantity
Stock required to close the 60-day target gap	102 units
Expected demand during the 30-day lead time	51 units
Indicative replenishment requirement	153 units

The displayed recommendation may vary slightly because of rounding and the exact inventory, forecast and configuration values used.

Why might the recommendation look higher than expected?

The recommendation may be higher than the simple difference between current and target inventory because it also allows for lead-time demand.

It may also be affected by:

• Recent changes in forecast sales
• Inventory already inbound or in transfer
• Changes to the target days cover
• Changes to supplier lead time
• Promotions or seasonal demand
• Inventory status changes
• The selected account, store or product filters

What should I review before placing an order?

Before using the recommendation, check:

1. Whether forecast weights reflect expected demand.
2. Whether the supplier lead time is current.
3. Whether the target days cover is appropriate.
4. Whether inbound or transferred inventory is already on its way.
5. Whether promotions or seasonal events will affect sales.
6. Whether minimum order quantities, case packs, storage capacity or cash-flow constraints apply.

Recommended replenishment is planning guidance rather than an automatic purchase order.

Important note

The appropriate days-cover target is specific to the product, supplier and operating model. The 90-day target used in the training example is illustrative and is not a universal MerchantSpring recommendation.

Need help?

Contact support@merchantspring.io and include the relevant account, store, ASIN, reporting period, forecast settings, supplier lead time and any helpful screenshots or exports.