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Demand Forecasting metrics and KPIs

What are Demand Forecasting metrics?

Crafting the perfect Demand Forecasting metrics can feel overwhelming, particularly when you're juggling daily responsibilities. That's why we've put together a collection of examples to spark your inspiration.

Copy these examples into your preferred app, or you can also use Tability to keep yourself accountable.

Find Demand Forecasting metrics with AI

While we have some examples available, it's likely that you'll have specific scenarios that aren't covered here. You can use our free AI metrics generator below to generate your own strategies.

Examples of Demand Forecasting metrics and KPIs

Metrics for Stock Turnover

  • 1. Stock Turnover Ratio

    The number of times inventory is sold and replaced over a period, calculated as Cost of Goods Sold divided by Average Inventory

    What good looks like for this metric: 5 to 10 times annually

    Ideas to improve this metric
    • Improve inventory management practices
    • Reduce lead time for supply orders
    • Increase sales through promotions
    • Implement Just-In-Time inventory system
    • Analyse and remove slow-moving products

  • 2. Days Sales of Inventory (DSI)

    The average number of days it takes to sell inventory, calculated as 365 divided by Stock Turnover Ratio

    What good looks like for this metric: 30 to 50 days

    Ideas to improve this metric
    • Conduct periodic inventory reviews
    • Enhance demand forecasting accuracy
    • Optimise pricing strategies
    • Streamline supply chain processes
    • Implement vendor-managed inventory

  • 3. Gross Margin Return on Inventory Investment (GMROII)

    A measure of inventory profitability, calculated as Gross Margin divided by Average Inventory Cost

    What good looks like for this metric: Above 2.0

    Ideas to improve this metric
    • Negotiate better terms with suppliers
    • Identify and promote high-margin products
    • Reduce inventory carrying costs
    • Sell off obsolete inventory
    • Utilise sales data for inventory optimization

  • 4. Inventory to Sales Ratio

    The ratio of inventory held against sales made, reflecting inventory management efficiency

    What good looks like for this metric: 0.12 to 0.20

    Ideas to improve this metric
    • Push sales for slow-moving items
    • Improve demand planning
    • Regularly adjust stock levels to sales patterns
    • Implement an advanced inventory tracking system
    • Diversify the product line to match consumer demand

  • 5. Backorder Rate

    The percentage of orders that cannot be filled at the time of purchase, indicating potential stock deficiencies

    What good looks like for this metric: 2% to 4%

    Ideas to improve this metric
    • Enhance communication with suppliers
    • Better demand forecasting and planning
    • Increase safety stock levels for high-demand products
    • Monitor and adjust reorder points
    • Invest in an integrated supply chain management system
inventory-turnoverdemand-forecastinginventory-managersupply-chain-analystsales-teaminventory-management-team
Implement these metrics

Tracking your Demand Forecasting metrics

Having a plan is one thing, sticking to it is another.

Don't fall into the set-and-forget trap. It is important to adopt a weekly check-in process to keep your strategy agile – otherwise this is nothing more than a reporting exercise.

A tool like Tability can also help you by combining AI and goal-setting to keep you on track.

Tability Insights DashboardTability's check-ins will save you hours and increase transparency

More metrics recently published

We have more examples to help you below.

Planning resources

OKRs are a great way to translate strategies into measurable goals. Here are a list of resources to help you adopt the OKR framework:

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