A study was done of stock control and sales, which highlight the need for proper stock ordering.
Here are some interesting points.
1) There was minor effect of increasing stock holding compared to shop sales. Often buyers were just buying the wrong stock, e.g. they brought plenty of black and blue pens but not enough red pens.
2) Overall most stores had about an 8% chance of running out of an item yearly.
3) A shopper with a list of ten items has only a 52% chance of finding everything on their list.
4) The retailers' ordering process was at fault for out of stock situations more than 80% of the time.
5) A typical retailer loss was about 5% of sales for each year because they are out of stock.
I was thinking while reading this report that as far as I know in our market space we are the only ones with a demand forecasting system.
