Calling all Retailers: Three Easy Inventory Allocation Methods

One of the biggest challenges for a merchandiser or inventory planner is determining how much product needs to be distributed to each store, and creating the necessary documentation to have those items picked and shipped. With RF-SMART’s Preallocation feature, this process has been made much easier.

Retailers need to accurately determine Item Allocations

With the rise of the omni-channel experience, inventory cycles have gone from months to weeks, and shoppers have been trained to spend their money with the retailers who have the right products when and where they want them.

So with inventory turning at a faster pace than ever, how do NetSuite retail customers ensure they don’t lose sales by having the right products at the right store at the right time? 

By mastering inventory allocations.

3 Methods for Inventory Allocations

With RF-SMART, there are three methods to determine the allocation of your items before they even arrive:

1. The first method is an even distribution where all stores receive the same quantity of the item. This is a good method for stores that are all the same size.

2. The second method is a weighted allocation where a size is assigned to each store. Sizes are created using a percentage of an average store. For example, if a store is 150% bigger than the average store, then that store would be assigned a size of 150. And if a store is ½ the size of an average store, than that store would be assigned a size of 50.

3. With the third method, you can use an existing item’s sales history or a similar item to determine the allocation. This method is typically used for seasonal items that are being restocked for a new year. With this method, you can also provide a hold-back percentage for the Distribution Center to keep inventory in the warehouse for reorders.

Inventory Allocation Best Practices

As you see, these three methods work best in different circumstances, but if the need arises, you can use different allocation methods for each line of the purchase order. You can even allocate items to a Distribution Center or exclude a retail store either for all allocations or at the purchase order line level.

Since some of these purchases may be for new items, a best practice is to create these allocations at the time the purchase order is created, using this information to determine the merchandise strategy and store product placement.

After the allocation is determined, this can be saved and reviewed or changed when the items are received and distributed automatically.

Gone are the days of creating and keying in manual transfers for your inventory. With Retail Inventory Management, mastering allocations is as simple as “Wax on, Wax off.”