A clear breakdown of product distribution across predictable sales, new products, and unpredictable sales, which can be highly informative when used effectively.
1. Inventory Planning & Stock Coverage
If a high percentage of products fall into predictable sales, it suggests stability, allowing for reliable stock replenishment.
A high percentage of new products indicates the need for careful stock monitoring since their sales trends are still uncertain.
A significant portion in unpredictable sales may require special strategies like safety stock buffers or deeper investigation into demand fluctuations.
2. Demand Forecasting & Decision-Making
Tracking how these percentages shift over time can reveal trends (e.g., an increasing share of new products may be a significant sign for variation in future forecasts).
You can refine sales predictions based on how products transition between categories. For example, if products consistently moves from predictable to unpredictable sales, it might need a different inventory strategy.
3. Performance Evaluation
Comparing these percentages across different time periods helps assess how well your demand planning strategy is working.
If a large proportion remains in unpredictable sales, it may indicate inefficiencies in forecasting or external market fluctuations affecting sales.