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gotchas.md

153 lines · small-business/skills/inventory-planner/reference/gotchas.md at 2574e29

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1# Gotchas
2
3The mistakes that stock out a bestseller or bury cash in a pallet. Inventory errors are slow and expensive — they show up as a missed sale or a shelf nobody touches for two years.
4
5---
6

Gotchas

The mistakes that stock out a bestseller or bury cash in a pallet. Inventory errors are slow and expensive — they show up as a missed sale or a shelf nobody touches for two years.

Raw lines 1 to 6
7## Gotcha: counting a stockout as zero demand
8
9**Why it matters:** This is the most damaging error in the whole skill, and it is self-reinforcing. The item ran out because it sells. The zero-sales days drag the velocity down. The next order is smaller. It runs out sooner. Repeat.

Gotcha: counting a stockout as zero demand

Why it matters: This is the most damaging error in the whole skill, and it is self-reinforcing. The item ran out because it sells. The zero-sales days drag the velocity down. The next order is smaller. It runs out sooner. Repeat.

Raw lines 7 to 10
11### Bad
13```
14Merv 11 filter: 12 units sold in 28 days = 0.43/day. Slow mover, no reorder.
15```
16(the shelf was empty for 20 of those 28 days)

Bad

Merv 11 filter: 12 units sold in 28 days = 0.43/day. Slow mover, no reorder.

(the shelf was empty for 20 of those 28 days)

Raw lines 11 to 17
18### Good
20```
21Merv 11 filter: 12 units in the 8 days it was actually in stock = 1.5/day.
22Out of stock 20 of the last 28 days — that is suppressed demand, not slow sales.
23Planning on 1.5/day.
24```
26---

Good

Merv 11 filter: 12 units in the 8 days it was actually in stock = 1.5/day.
Out of stock 20 of the last 28 days — that is suppressed demand, not slow sales.
Planning on 1.5/day.
Raw lines 18 to 27
28## Gotcha: ordering into a one-week spike
30**Why it matters:** A single bulk order makes an ordinary item look like a runaway for exactly seven days. Sixty days of cover sized off that number is a pallet the owner paid for and will look at for a year.

Gotcha: ordering into a one-week spike

Why it matters: A single bulk order makes an ordinary item look like a runaway for exactly seven days. Sixty days of cover sized off that number is a pallet the owner paid for and will look at for a year.

Raw lines 28 to 31
32### Bad
347-day velocity 5.8/day vs 28-day 0.4/day. Size 60 days at 5.8/day.

Bad

7-day velocity 5.8/day vs 28-day 0.4/day. Size 60 days at 5.8/day.

Raw lines 32 to 35
36### Good
38```
397-day rate is 14x the 28-day rate. Looking at the orders: one sale of 40 units
40on the 9th. That is a job, not a trend. Sizing on the 28-day rate and noting
41it in case that customer comes back.
42```
44---

Good

7-day rate is 14x the 28-day rate. Looking at the orders: one sale of 40 units
on the 9th. That is a job, not a trend. Sizing on the 28-day rate and noting
it in case that customer comes back.
Raw lines 36 to 45
46## Gotcha: recommending a reorder for a zero-velocity item
48**Why it matters:** Zero sales in 28 days means stop buying. A reorder point set years ago in the ERP will happily say otherwise, and following it converts working capital into shelf decoration.

Gotcha: recommending a reorder for a zero-velocity item

Why it matters: Zero sales in 28 days means stop buying. A reorder point set years ago in the ERP will happily say otherwise, and following it converts working capital into shelf decoration.

Raw lines 46 to 49
50### Bad
52NetSuite reorder point says 24, on hand is 6, so order 18.

Bad

NetSuite reorder point says 24, on hand is 6, so order 18.

Raw lines 50 to 53
54### Good
56```
57Zero units sold in 28 days. The stored reorder point says 24 — that is stale.
58Not a reorder. Six units, USD 340 tied up. Worth clearing.
59```
61---

Good

Zero units sold in 28 days. The stored reorder point says 24 — that is stale.
Not a reorder. Six units, USD 340 tied up. Worth clearing.
Raw lines 54 to 62
63## Gotcha: forgetting what is already on order
65**Why it matters:** Two orders for the same item three weeks apart is the classic double-buy, and it usually happens right after a stockout scare when the owner is paying attention.

Gotcha: forgetting what is already on order

Why it matters: Two orders for the same item three weeks apart is the classic double-buy, and it usually happens right after a stockout scare when the owner is paying attention.

Raw lines 63 to 66
67### Bad
69On hand 38, target 258, order 240.

Bad

On hand 38, target 258, order 240.

Raw lines 67 to 70
71### Good
73```
74On hand 38, 160 already inbound from the 3/2 order, target 258 total.
75That leaves 60 — 2 cases of 40, so 80 units. If that inbound number is
76wrong tell me, it changes this.
77```
79---

Good

On hand 38, 160 already inbound from the 3/2 order, target 258 total.
That leaves 60 — 2 cases of 40, so 80 units. If that inbound number is
wrong tell me, it changes this.
Raw lines 71 to 80
81## Gotcha: a stock count with no as-of date
83**Why it matters:** Everything downstream is stock divided by velocity. A two-week-old count on a fast mover produces a stockout date that has already passed.

Gotcha: a stock count with no as-of date

Why it matters: Everything downstream is stock divided by velocity. A two-week-old count on a fast mover produces a stockout date that has already passed.

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85### Bad
87Take the uploaded count at face value and project from today.

Bad

Take the uploaded count at face value and project from today.

Raw lines 85 to 88
89### Good
91Ask when it was counted. If the count is from the 1st and today is the 15th, either net out two weeks of sales or ask for a fresh count on the fast movers, and say which you did.
93---

Good

Ask when it was counted. If the count is from the 1st and today is the 15th, either net out two weeks of sales or ask for a fresh count on the fast movers, and say which you did.

Raw lines 89 to 94
95## Gotcha: seasonality invented from partial history
97**Why it matters:** A multiplier computed from nine months looks exactly like one computed from three years. It gets used to buy real stock, and nobody can tell later which kind it was.

Gotcha: seasonality invented from partial history

Why it matters: A multiplier computed from nine months looks exactly like one computed from three years. It gets used to buy real stock, and nobody can tell later which kind it was.

Raw lines 95 to 98
99### Bad
101```
102June factor: 1.6x (computed)
103```
104(from 120 days of data that do not include a June)

Bad

June factor: 1.6x (computed)

(from 120 days of data that do not include a June)

Raw lines 99 to 105
106### Good
108```
109120 days of history — no June in there, so I cannot compute a season.
110You know this better than the data does. Roughly how much heavier is June?
111```
113---

Good

120 days of history — no June in there, so I cannot compute a season.
You know this better than the data does. Roughly how much heavier is June?
Raw lines 106 to 114
115## Gotcha: velocity at the product level instead of the variant
117**Why it matters:** A product that sells well in one size and never in another looks healthy in aggregate. The good size stocks out while the bad size accumulates, and the product-level number shows neither.

Gotcha: velocity at the product level instead of the variant

Why it matters: A product that sells well in one size and never in another looks healthy in aggregate. The good size stocks out while the bad size accumulates, and the product-level number shows neither.

Raw lines 115 to 118
119### Bad
121Filter, 20x25: 4.1/day, 38 on hand, healthy.

Bad

Filter, 20x25: 4.1/day, 38 on hand, healthy.

Raw lines 119 to 122
123### Good
125Split by variant. The 1-inch is running out in four days; the 4-inch has nine months of cover. Two different problems, one product line.
127---

Good

Split by variant. The 1-inch is running out in four days; the 4-inch has nine months of cover. Two different problems, one product line.

Raw lines 123 to 128
129## Gotcha: reporting units without dollars
131**Why it matters:** Owners decide about cash. "Order 240 filters" is not a decision they can make; "USD 888" is.

Gotcha: reporting units without dollars

Why it matters: Owners decide about cash. "Order 240 filters" is not a decision they can make; "USD 888" is.

Raw lines 129 to 132
133### Bad
135A buy list of quantities with no cost column.

Bad

A buy list of quantities with no cost column.

Raw lines 133 to 136
137### Good
139Every line costed, every vendor subtotaled, and the total stated before the approval question.
141---

Good

Every line costed, every vendor subtotaled, and the total stated before the approval question.

Raw lines 137 to 142
143## Gotcha: quietly accepting a vendor substitution
145**Why it matters:** A different part number goes onto a customer's equipment. That is the owner's call and sometimes a warranty question, never a shipping detail.

Gotcha: quietly accepting a vendor substitution

Why it matters: A different part number goes onto a customer's equipment. That is the owner's call and sometimes a warranty question, never a shipping detail.

Raw lines 143 to 146
147### Bad
149Vendor swaps a compatible capacitor, order updated, nothing said.

Bad

Vendor swaps a compatible capacitor, order updated, nothing said.

Raw lines 147 to 150
151### Good
153Report the substitution, the part numbers both ways, and the effect on cover if the owner rejects it. Then let them decide.

Good

Report the substitution, the part numbers both ways, and the effect on cover if the owner rejects it. Then let them decide.

Raw lines 151 to 153