Glossary
Demand Classification
Demand classification is the process of categorizing items based on their demand patterns to select appropriate forecasting and inventory management methods.
Full explanation
Stocklyst uses the Syntetos-Boylan 2005 classification framework, which categorizes items into four types based on average inter-demand interval (ADI) and coefficient of variation of demand size (CV²): Smooth (low ADI, low CV²), Erratic (low ADI, high CV²), Intermittent (high ADI, low CV²), and Lumpy (high ADI, high CV²).
Each category receives different statistical treatment for safety stock and reorder point calculations. Smooth items use standard formulas. Erratic items receive adjusted variability parameters. Intermittent and lumpy items get higher safety factors and modified demand averaging windows to account for their irregular ordering patterns.
How Stocklyst handles this
Stocklyst classifies every item’s demand pattern automatically using the Syntetos-Boylan 2005 framework. The classification drives which statistical parameters are used for safety stock and reorder point calculations, ensuring that intermittent and lumpy demand items are not treated like steady sellers.
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