Inventory words, explained

The words you will see in Narada, in plain English. Each one in a sentence or two.

Buying and stock

Reorder point The stock level at which you should order again, so the new delivery lands before the shelf is empty.

Safety stock Extra stock you hold for the bad weeks: when more sells than usual, or a delivery comes late.

Lead time The days from placing an order to the goods arriving. Once there are enough deliveries to measure, Narada plans on what your supplier actually did, not what it promised.

Service level How sure you want to be of not running out while you wait for a delivery. Higher means more stock and fewer empty shelves.

Supplier minimum (MOQ) The smallest order a supplier will accept. When the minimum is far bigger than what you need, Narada tells you what holding the extra would cost, and whether to buy it or hold off.

Order multiple The batch size a supplier sells in, for example boxes of 12. Narada rounds each suggested quantity up to it.

Pack size How many units come in one pack. It is printed on the exported purchase order. It does not change how much Narada suggests.

Transfer Moving stock from a branch that has too much to a branch that needs it, instead of buying more.

Cover How many days your current stock will last at the rate it is selling.

A, B and C parts Your parts grouped by how much they matter. A parts are the few that bring in most of your sales. C parts are the many that bring in little.

Target How sure Narada aims to be that a part will not run out while you wait for a delivery. Each class has a floor. See How sure Narada aims to be.

Lost-sale share When a part is out, the share of customers who buy elsewhere instead of waiting. Until you answer it, Narada assumes all of them do.

Money

Money at risk, by kind The money across the top of Today. It comes in four kinds, each with its own period, and Narada never adds them together:

• Trapped in stock: stock that will not sell on its own, at cost, today.
• Costs and lost margin, per year: what repeat problems cost you each year.
• Costs and lost margin, last 90 days: the same kind of loss over the last 90 days.
• Margin at risk from stockouts: the profit you could lose until stock can land.

Trapped stock Money sitting on your shelves in stock that isn’t selling, or that you hold far more of than you sell. Counted at what you paid for it.

Dead stock Parts that have not sold for a long time. You decide how long counts as dead in Your Numbers.

Cost of waiting What one more day without acting costs you, mostly the margin on sales you lose while a part is out of stock. It is the price of doing nothing, not money already lost.

Banked What Narada counts as value from findings you acted on. It adds cash measured in your data afterwards and losses avoided (an estimate). It is not the same as cash in the bank.

GMROI How many dollars of gross margin (sales minus what the goods cost you) each dollar of stock earns in a year. Narada measures the last 90 days and scales it to a year. Narada flags parts that earn too little for the cash they tie up.

Cash conversion cycle How many days your cash is tied up between paying a supplier and getting paid by a customer. Shorter means you need less cash to run the business.

Plans

Analyst plan The base plan. Every page in this guide comes with it, unless the page says it needs the Planner plan.

Planner plan Adds buying: What to Order, Orders, Forecast and each part’s page. If you open one of these on the Analyst plan, you see an upgrade screen.

Forecasts

The free report Narada’s test on your own data before you buy. It replays your last year twice, once with your buying and once with Narada’s. You may also hear it called the free test, the proving run, or the digital twin report. In the app, it lives on the Reports page. See The free report.

Forecast Narada’s estimate of how many of a part will sell each week.

Forecast range Instead of one number, each week’s forecast comes with a range that sales should land inside most of the time. Narada checks afterwards whether they did.

Forecast error How far the forecast missed. Narada only uses a forecast to size your orders when it beats the simplest possible guess.

Plain average The average of a part’s last 13 weeks of sales, carried forward. Every forecast has to beat it. See How the forecast is made.

Stockout week A week when the part was out of stock for much of the time. Its sales understate what customers wanted, so the forecast lifts it before learning from it.