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Understanding Inventory Deviation

Sarah Barr
Sarah Barr
  • Updated

Inventory Deviation Calculation

Inventory deviation measures the difference between Forecasted Beginning-of-Month (BOM) Inventory and Actual BOM Inventory. This metric helps retailers understand discrepancies between their inventory plans and actual stock levels, allowing for adjustments in purchasing, allocation, or sales strategies.

Formula:

A positive deviation indicates excess inventory, while a negative deviation suggests a shortfall, both of which can impact cash flow and sales performance.

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