Managing inventory effectively requires choosing the right replenishment method for your business needs. Unleashed's Advanced Inventory Manager (AIM) offers two distinct approaches: Modelling and Forecasting. Each product in your system will use one method or the other, you can disable a forecast at any time to return a product to the modelling system.
Modelling: Quick Setup with Static Stock Limits
Modelling establishes minimum and maximum stock levels based on your recent demand patterns and your target days of stock coverage.
Key characteristics:
Bulk processing makes it ideal for quickly setting up inventory management across many products.
Works with the Reorder Report to generate stock alerts and trigger purchases, assemblies, or transfers.
Static limits require periodic recalculation to stay relevant as your business changes.
Average-based calculations use historical demand data, which may not accurately reflect future needs.
Requires transaction history to calculate demand rates—new products without history will calculate to zero.
How Modelling Works
When you use modelling, AIM calculates your minimum and maximum stock levels using your product's historical demand rate and your specified days of stock. The Reorder Report then monitors these limits and alerts you when stock falls below the minimum threshold, prompting you to replenish up to the maximum level.
However, because demand naturally varies over time while your stock limits remain fixed, this approach can sometimes struggle to match supply with actual need. During periods of higher demand, you may experience stock shortages. Conversely, when demand is lower, you might find yourself holding excess inventory after replenishing to your maximum level.
Since modelling relies on calculating an average rate of demand from past transaction history, it cannot be used effectively for new products that lack historical data—the calculations would simply return zero.
Forecasting: Dynamic Planning with Transaction Awareness
Forecasting represents a step up from Modelling, offering significantly more control for managing individual products. We recommend creating forecasts for your most important inventory items where precise planning delivers the greatest value. Unlike Modelling, which looks backward at historical patterns, Forecasting allows you to set future demand expectations. This forward-looking approach makes it perfect for new products, you can create a forecast for anticipated growth and plan replenishments even without any transaction history.
Key characteristics:
Product-by-product configuration allows for tailored management of individual items
Uses the AIM Replenishment tab to display detailed replenishment schedules
Transaction-aware planning helps predict stock-out risks from your current orders and commitments
Flexible strategies including the option to set manual limits similar to modelling
Minimum Order Quantities can be configured to optimize replenishment batch sizes
Production Planning integration calculates requirements throughout your supply chain
Works for new products by setting future demand expectations rather than relying on history
How Forecasting Works
With a Days of Stock forecasting strategy, AIM analyzes the timing and quantity of expected demand across different periods. Rather than simply maintaining static minimum and maximum levels based on average demand, the system dynamically calculates replenishment requirements based on the specific amount of demand forecast to occur on following days.
This day-by-day demand awareness makes Forecasting much more suitable for products with variable demand patterns, including seasonal products, new product launches, and end-of-life products. The system can adapt to changing demand levels throughout a product's lifecycle in ways that average-based modelling cannot.
The Supply chart visualizes your projected stock levels over time, while the Replenishments tab provides a detailed schedule showing exactly what quantity you need and when you need it. Because forecasting understands that demand varies by date and accounts for the timing of incoming and outgoing transactions, it can plan more precisely than the immediate replenishment approach of the Reorder Report.
Taking Forecasting Further with Production Planning
AIM Production Planning extends forecasting capabilities throughout your manufacturing process. When enabled, this feature uses forecast replenishments to automatically calculate demand for linked components. The Replenishments tab then displays all required replenishments across your entire supply chain, eliminating the need to manually forecast each component (though you can still forecast components individually if you sell them separately from production use).
Compare and Choose Your Approach
Modelling with stock limits triggers replenishments through the Reorder Report when inventory drops below your minimum threshold. The system calculates stock limits using the average rate of demand from a past time period combined with your desired days of stock. While this provides a straightforward management system, variable demand can result in either insufficient stock during high-demand periods or excess inventory when demand is lower. The system reorders up to your maximum level based on average historical demand, which may not align with actual future needs.
Forecasting with a Days of Stock strategy plots required replenishments dynamically by calculating the amount of demand expected to occur on specific future days. This approach populates the Replenishments tab with precise quantities and dates for each replenishment. AIM Forecasting offers a much more detailed stock control system—instead of using average demand to calculate static limits, it calculates replenishment dates and sizes based on day-by-day demand variations. This makes forecasting far more effective for products with changing demand patterns throughout their lifecycle.
Consider Modelling when:
You need to quickly establish inventory management across many products
Your demand patterns are relatively stable and predictable
You're comfortable with periodic manual recalculation of stock limits
Your products have sufficient transaction history for meaningful calculations
Immediate replenishment based on current stock levels meets your needs
Consider Forecasting when:
You're managing your most important inventory items that warrant detailed planning
You're launching new products without transaction history
Your products have seasonal demand patterns or variable lifecycles
You're managing end-of-life products with declining demand
You need detailed, time-based replenishment planning
Your business has variable demand patterns or complex supply chain requirements
You want to proactively identify potential stock-out risks from open transactions
You're managing production and need to plan component requirements
The additional setup effort per product provides valuable planning benefits
Key Points to Remember
Forecasting is a step up from Modelling, offering greater control and precision for your most important products
Modelling requires history—new products cannot be modelled effectively as calculations will return zero
Forecasting works for new products by allowing you to set future demand expectations and plan for growth
Forecasting suits variable demand including seasonal products, new product launches, and end-of-life scenarios
Each product/warehouse combination uses either Modelling or Forecasting, not both simultaneously
Forecasting enables production planning throughout your supply chain
You can switch methods by disabling forecasts to return products to modelling
Manual limits in Forecasting can replicate modelling behavior when needed
Choose the method that best matches your operational complexity and planning requirements. Many businesses start with Modelling for straightforward inventory management across their full catalog, then create Forecasts for their most valuable or complex products that benefit from more sophisticated planning capabilities.