Inventory glossary
What is Forecast horizon?
Forecast horizon is the length of time ahead that a sales forecast covers, such as the next 30 days or the next 90 days.
A short horizon reacts fast to recent sales but can miss slower trends like a supplier's long lead time. A long horizon smooths out noise but can be wrong if demand shifts. The horizon you pick should match how far ahead you actually need to plan, which for reordering usually means your lead time plus a buffer.
For a small Shopify store, the right horizon depends on the product. A candle that sells steadily might only need a 30-day forecast. A seasonal item or one bought from an overseas supplier with a long lead time needs a forecast that stretches further out, so you are not caught short while stock is in transit.
Example
A candle store sells 10 units a day on average. If the supplier's lead time is 20 days, the store needs a forecast horizon of at least 20 days to know how much stock to order now. Forecasted demand over that horizon is 10 x 20 = 200 units, so the store should reorder before stock drops below roughly 200 units.
Common mistakes
- Using a 7-day forecast horizon when the supplier's lead time is 45 days, leaving no time to react.
- Using one fixed horizon for every product instead of matching it to each SKU's lead time.
- Ignoring seasonality within the horizon, such as forecasting a flat 60 days over a holiday spike.
Forecast horizon and SteadyShelf
SteadyShelf sets its forecast horizon per SKU based on each supplier's lead time, so order-by dates reflect how far ahead that specific product actually needs to be planned.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Demand forecasting · Lead time · Lead time demand · Days of supply · Reorder point
FAQ
How long should a forecast horizon be?
It should cover at least your supplier's lead time plus the time until your next planned reorder, so you have enough warning to place the next order before stock runs out.
Does a longer forecast horizon always give a better forecast?
No. Longer horizons are more likely to be thrown off by changes in demand, so accuracy often drops the further out you forecast.
Let SteadyShelf do this math for every SKU
Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.
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