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 14% CLTV Uplift

Impact Area: Customer Lifetime Value

How a fast-growing marketplace drove a ~14% uplift in 12-month CLTV with Algodel AI

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About the Project

A national brick-and-mortar retail chain was facing chronic issues with out-of-stock (OOS) scenarios in key categories, coupled with excess inventory in long-tail SKUs. Manual reorder processes, siloed inventory data, and inconsistent lead-time visibility resulted in poor stock placement and reactive planning.

The client needed an intelligent inventory management solution that could forecast demand, automate replenishment, and dynamically maintain optimal stock levels across locations.

Key inventory issues: stockouts, overstocking, lack of safety stock framework, and manual reorder inefficiencies.

Key Issues

  • Frequent stockouts in fast-moving SKUs, leading to revenue loss and poor customer experience

  • Overstocking in low-velocity items, impacting working capital and shelf space

  • Absence of a scientific safety stock framework across categories

  • Manual reorder triggers exposed to human error and inconsistent lead-time buffers

Predictive inventory framework with data consolidation, safety stock modeling, classification, automated replenishment

Our Approach

A Predictive, Data-Driven Inventory Framework

We deployed a modular inventory optimization system designed to bring intelligence into day-to-day stocking decisions.

  • Data Consolidation: Integrated historical sales, supplier lead times, seasonal effects, and demand volatility

  • Safety Stock Modeling: Built calculators for dynamic safety stock thresholds based on category-level service goals and historical variability

  • Inventory Classification: Segmented items into A/B/C buckets using rate-of-sale logic to apply differentiated stocking strategies

  • Replenishment Automation: Enabled automated reorder triggers using predefined rules and API integrations with ERP systems

  • Alerting Mechanism: Configured variance alerts and dashboards to monitor high-risk SKUs and avoid OOS events

Impact

  • Reduced stockouts by ~15% across high-priority SKUs

  • Freed up shelf and working capital by minimizing excess inventory

  • Achieved consistent replenishment cycles through automated reordering

  • Created a unified stock intelligence layer shared by supply chain, store ops, and finance teams

  • Inventory system now recalibrates safety stock thresholds weekly with updated inputs

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