How Net Demand and On-Hand Inventory Work in LevaData Follow

Overview

LevaData calculates component-level demand using two concepts—Dependent Demand and Independent Demand—and displays Net Demand based on your tenant configuration. On-Hand Inventory directly reduces the amount of material you may need to purchase, helping avoid over-buying and improving forecast accuracy.

On-Hand Inventory and demand values are visible inside Spend Intelligence → Forecast Detail, where the platform applies inventory according to your tenant configuration.

At a glance

• Supports Dependent and Independent Demand
• Net Demand = Gross Demand – On-Hand Inventory (depending on Demand configuration)
• On-Hand may roll to future quarters
• Location: Spend Intelligence → Forecast Detail

Demand Types in LevaData

Dependent Demand

Derived from:

• product-level forecast, and
• component usage in the flat BOM

Dependent Demand = Product Demand × Component Usage

Independent Demand

Represents direct demand not tied to product forecasts (for example):

• spare parts
• service parts
• field repairs
• replacement units

Gross Demand vs Net Demand

Gross Demand = Dependent + Independent Demand
On-Hand Inventory = component inventory provided by the customer
Net Demand = Gross Demand – On-Hand Inventory (when Net Demand configuration is enabled)

Demand Configuration (Gross vs Net)

Gross Demand

• On-Hand Inventory not subtracted from Gross Demand

Use when your forecast already incorporates On-Hand Inventory

Net Demand

• On-Hand Inventory is subtracted from Gross Demand
• Remaining On-Hand Inventory balances may roll to future quarters

Use when LevaData should adjust the Net Demand based on On-Hand Inventory

Where Demand and On-Hand Inventory appear

You can view demand and inventory values in:

• Demand Breakup Table
• Component Forecast Details

On-Hand Inventory Allocation

If Net Demand is enabled, On-Hand Inventory is applied against forecasted demand and may roll forward depending on allocation configuration.

Allocation Configuration Options

LevaData supports three tenant-level settings that determine when On-Hand Inventory is applied and whether any remaining balance rolls into future quarters.

1. Current Quarter Only (CQ)
Net Demand (CQ) = Gross Demand (CQ) – On-Hand Inventory (CQ).
If the result is negative, Net Demand is set to zero. Any remaining On-Hand Inventory is not carried forward to future quarters.

2. Current Quarter + Future Quarters (CQ and beyond)
Any remaining On-Hand Inventory after CQ is applied to CQ+1 and future quarters until the remaining balance is fully consumed. Net Demand is calculated each quarter using the remaining On-Hand Inventory.

3. Future Quarters Only (beginning CQ+1)
Remaining On-Hand Inventory is first applied starting in CQ+1 (not the current quarter), and then continues into subsequent quarters until the remaining balance is fully consumed.

Why this matters

Configuring Net Demand and On-Hand allocation helps organizations:

• avoid unnecessary purchasing
• manage excess inventory
• reduce working capital tied up in components
• ensure purchasing decisions match true requirements

Frequently Asked Questions

Does On-Hand Inventory reduce my demand?

Yes—if your tenant is configured for Net Demand.

Where does On-Hand Inventory come from?

On-Hand Inventory values are supplied by your organization through the Forecast Normalized Template (field: on_hand_inventory_qtr). Only current quarter values are used; future quarter values are ignored.

Can On-Hand Inventory roll into multiple quarters?

Yes—if configured to do so.

How far forward can On-Hand Inventory roll?

This depends on your tenant’s allocation setting (CQ only, CQ+1, or future-quarter roll-forward).

Why do Forecasts and Actuals appear the same in current/future quarters?

Spend Intelligence calculates spend using Actuals. During ingestion, Actuals are set equal to Forecast for any quarter where Actuals are not supplied. If you later provide Actuals for historical quarters, those spend values will update accordingly.

When will configuration changes take effect?

After your next scheduled data refresh.

Need to change your configuration?

Contact your LevaData Customer Success Manager or open a request with LevaData Support to adjust allocation behavior or switch between Gross Demand and Net Demand. New settings will be reflected after the next data load.