Product availability indicator is very important for retailers. It can be used to find out how efficiently certain products are being sold and to identify the reasons for a decline in purchases. The availability indicator provides the opportunity to monitor balances and replenish them in a timely manner.

There are 3 approaches to calculating this indicator:

1. Based on the residuals

To make the calculation, you need to know the days when the product was present on the shelves or in the warehouse, divided by the total number of days between deliveries. For example, a shop sells milk of a particular brand. All of its packs from the batch (20 packs) are sold in 3 days. A new delivery is expected in 6 days, and for 3 of those days the racks remain empty. This means that with 100% availability, the number of sales could potentially rise to 40 units. The bottom line is that it makes sense for the specified point of sale to double the product order.

It is worth bearing in mind that the indicator has peculiarities, as the above represents an ideal model for the operation of a marketplace. In reality, the situation could be as follows:

• items may not be on the shelves but may be in stock
• some of the products may be defective or expire, making them impossible to display in the store
• items may not be displayed on a regular basis, thus distorting the real picture.

If factors are noticed, it can be said that the shop is inefficient and the data obtained is inaccurate. As a result, sales at the point of sale will be lower than calculated.

2. Sales availability

The facts of the purchase of the product are taken into account here. If the product has been purchased for 6 days during the week (between refills), this means that the ratio will be: 6/7=85%. Therefore, it is recommended to increase the purchase volume by 15%.

The indicator is appropriate for products that are in daily demand - dairy products, bakery products, confectionery. If it is used to calculate, for example, the availability of high-end alcohol, the final figure will be inaccurate, as it may not be purchased due to its high cost.

3. Minimum stock calculation

This methodology is useful for supermarkets selling a significant number of products. To understand the calculation, you need to understand what the minimum stock is. It is the number of items that customers need to buy each day in order for the retailer to make a profit.

The coefficient is calculated similarly to the first one, but it does not take into account all those days when the goods, although on balance, did not exceed the allowable minimum. The method can be considered the most effective. It helps not only to fill the shelves in time, but also to determine the optimum volume of goods.

Why manage product availability?

In the case of a small retail shop, it is often easy to calculate the number of items to buy. The retailer just has to look at the window displays and assess which items need to be added to them. However, when it comes to organising purchasing in even a medium-sized market, this task becomes more difficult. The store owner cannot be guided by the current situation - he has to see the big picture over a week, or better still, a month, because not all purchases can be regular and systematic.

If the point of sale is well managed, management always knows which items are in short supply and which are in excess on the shelves. Also, if this process is properly organised, it can determine how well staff are working - whether they are displaying products on time, monitoring expiry dates, etc. As a result, such shop owners are not only able to improve internal management, but also to increase profits.