It's important to understand how your stock on hand will be replenished using different methods in Unleashed. You can choose to use two main methods: Modelling or Forecasting. A product will either be managed using Modelling or Forecasting. You can disable a forecast if you wish to return it to the modelling system. 

Let's review the differences:

Modelling

Modelling sets stock limits (high and low) based on your recent rate of demand and how many days of stock you want to hold.

Here are some things to consider:

• Modelling is done in bulk, so a great system to get started quickly
• Relies on the Reorder Report to generate stock alerts and purchases/assemblies/transfers
• Stock limits are static and need to be recalculated periodically
• The rate of demand is calculated as an average from the products history, and may not be representative of future demand. 

Forecasting

Forecasting sets future demand, incorporating your open transactions and your desired Days of Stock you want to hold. AIM then calculates the required replenishment quantity and times to ensure you have enough stock for the forecast demand over time. 

Here are some things to consider:

• Forecasting is done product by product
• Forecasting makes use of the AIM Replenishment tab
• Forecasting is far more detailed and able to predict stock out risks arising from your open transactions
• You can set a forecast to 'Manual' and set static stock limits similar to Modelling if you wish
• You can set Minimum Order Quantities in Forecasting to control the size of your replenishments
• You can calculate all the steps necessary for a production plan by enabling our Production Planning feature.

If we look at these two examples of a future stock on hand using either Modelling & Stock Limits, or Forecasting and the Replenishments Plan:

Looking above, you can see that Modelling stock limit for min/max stock will trigger replenishments via the Reorder Report. However, because the rate of demand is variable, the replenishments are struggling to meet demand, and then excessive in stock holding. This is due to the calculation reordering stock up to max. AIM will model the min/max based on the average rate of demand from the products history and the number of days of stock you want to hold. You could also manually set the min/max in Forecasting, which would act in the same was and Modelling.

Alternatively, you can forecast a product with a Days of Stock strategy. AIM forecasting will then plot the required replenishments in the Supply chart based on a dynamic calculation of how much demand is forecast to occur within a given time period. Forecasting will populate the Replenishments tab, detailing the quantity and date of each required replenishment.

Because AIM Forecast is aware of the timing of transactions and the amount of demand across different days, it is able to plan requirements, while the Reorder Report will simply tally the required stock and prompt to replenish immediately. You can take forecasting further with AIM Production Planning. This will use the forecast replenishments to pass demand on to linked components. The replenishments tab in AIM will then list all the required replenishments through your supply chain without the need to forecast demand on each component (which you can still do if you plan to sell a component separately to production usage).

Points to remember: 

• Forecasting is more detailed, but requires more effort
• A product/warehouse is either Modelled or Forecast, not both
• Forecasting allows you to plan production

Check out the rest of our support documentation to learn how to use these two main systems in AIM!