Optimizing retail supply chains : a comprehensive analysis of sales forecasting and fill rate correlation for enhanced inventory management

Abstract

Purpose - In the context of Sri Lanka's retail industry, this study aims to provide accurate and reliable constructions of sales forecasting, fill rate, inventory, and a measurement tool. It also looks at the examination of the link between sales forecasting and fill rate for improved inventory management. Methodology – Five years' worth of data, gathered directly from the business intelligence platform of Sri Lankan retail establishments, were needed for a thorough analysis. The data ranges from 2019 to 2023. Retail locations that were all supplied by the same distribution center provided the data that was gathered. Every month, information was gathered from every retail location. Among the product subcategories, there are 1923 SKUs; the sanitary goods subcategory has the fewest products (71 SKUs) and the hair care subcategory has the most products (411 SKUs). The number of products sold, the fill rate, and the monthly sales performance for all personal care products carried out by the retail outlet make up the outlet level data that is gathered. Findings - The data implies that bigger inventories are linked to better selling outcomes because there is a significant positive correlation between inventory and sales success. However, the correlation between inventory and product variety, as well as sales performance and product variety, is weak and not statistically significant. Limitations - The focus on a single product category using nine subcategories.