Demand profiling

To access Demand Profiling, navigate to the Segmentation Dashboard and click on the dropdown menu.

Clicking on the Segmentation Dashboard name will open a dropdown menu. From this menu, select Demand Profiling to access and analyze the segmentation results.

Dimensions

Demand profiling has two major components.. 

• Average Demand Interval (ADI) measures demand regularity in time by computing the average interval between two demands.

• The square of the Coefficient of Variation (CV²) measures the variation in quantities.

Based on these two components, demand profiles are classified into four categories.

• Smooth demand (ADI < 1.32 and CV² < 0.49). The demand is very regular in terms of time and quantity. 

• Intermittent demand (ADI >= 1.32 and CV² < 0.49). The demand shows minimal variation in demand quantity but a high variation in the interval between two demands.

• Erratic demand (ADI < 1.32 and CV² >= 0.49). The demand has regular occurrences in time with high quantity variations. 

• Lumpy demand (ADI >= 1.32 and CV² >= 0.49). A significant variation in quantity and time characterizes the demand. 

The demand profiling results can be accessed in two tables.

1. Summary Table: The summary table displays the number of products classified under four demand profiles. This provides a quick overview of how products are distributed based on their demand patterns.

2. Demand profile details table: The details table will provide the following information.

   1. Average Volume – The average number of units sold over a specific period.

   2. Standard Deviation – Measures the variability in demand. A higher standard deviation indicates more fluctuation in demand.

   3. CV2 (Coefficient of Variation Squared) – A statistical measure used to classify demand patterns. It helps determine whether a product has stable or unstable demand.

   4. Total Volume – The total number of units sold during the analyzed period.

   5. Demand Classification – The type of demand pattern the product follows. In this case, all products listed are classified as Intermittent demand, meaning demand occurs irregularly with varying intervals between orders.