Purpose
Surface the specific SKUs carrying aging inventory risk before they become dead stock — using weeks-on-hand, sell-through rate, and forward coverage together rather than any single metric — and translate that risk into ranked tiers, dollar exposure estimates, and concrete markdown or exit actions. Solves the problem of aging risk hiding inside aggregate inventory reports until it's too late to act profitably.
When to Use
Invoke this skill when the user asks to:
- Identify slow-moving, overstocked, or aging SKUs in their assortment
- Review inventory health or flag SKUs at risk of becoming dead stock
- Prepare a markdown or clearance plan for a category or season
- Estimate carrying-cost or end-of-season liquidation exposure
- Decide which SKUs to reorder, hold, mark down, or exit
- Build a weekly or monthly aged-inventory watchlist
Inputs Required
Before starting, collect:
- SKU data set: A list or table with, per SKU: units on hand, unit cost, retail price, and units sold over a recent trailing period (state the period length)
- Trailing sales window: The number of weeks the sales data covers (e.g., last 8 weeks) — used to compute velocity
- Category / department: The merchandise category being analyzed (drives seasonality context)
- Season or product lifecycle stage: Core/replenishment vs. seasonal, and where in the season (early / mid / end-of-season)
- Aging thresholds: Weeks-on-hand cutoffs the brand uses to define "aging" — if unknown, defaults are applied
- Markdown budget or constraint (optional): Any cap on total markdown dollars available
- On-order / inbound units (optional): Units already in the pipeline, to catch compounding overstock
If aging thresholds are missing, default to: Weeks-on-Hand ≥ 16 as at-risk and ≥ 26 as critical for seasonal goods, and ≥ 26 / ≥ 40 for core replenishment goods. If lifecycle stage is missing, assume mid-season seasonal. State any defaults applied.
Instructions
Step 1: Compute Core Velocity Metrics Per SKU
For every SKU, calculate:
- Weekly sell-through rate (STR): (units sold in trailing window ÷ trailing weeks) ÷ average units on hand, expressed as a weekly %
- Average weekly units sold (velocity): units sold ÷ trailing weeks
- Weeks-on-Hand (WOH): current units on hand ÷ average weekly units sold. If velocity is 0, flag WOH as "No Movement" (infinite)
- Forward coverage: how many weeks of supply on hand cover, including on-order units if provided
- Retail value at risk: units on hand × retail price
- Cost exposure (carrying liability): units on hand × unit cost
Round WOH to one decimal; present STR as a percentage.
Step 2: Apply Multi-Signal Risk Classification
Do not rely on WOH alone. Classify each SKU using three signals together:
- Signal A — Weeks-on-Hand vs. the aging thresholds (default or provided)
- Signal B — Sell-through velocity trend: STR below 5%/week is stalling; near-zero over the full window is dead
- Signal C — Forward coverage vs. remaining season: if forward coverage exceeds the weeks left in the season, the SKU cannot sell through at current pace
Assign a risk tier:
- Tier 1 — Critical: WOH at or above critical cutoff AND (near-zero velocity OR forward coverage far exceeds season remaining). Will not clear without intervention.
- Tier 2 — At Risk: WOH at or above at-risk cutoff with slowing velocity, or forward coverage exceeds season remaining but velocity is still positive.
- Tier 3 — Watch: Approaching at-risk WOH, or velocity declining but coverage still workable. Monitor, don't act yet.
- Healthy: Below at-risk WOH with adequate velocity — excluded from the action list but counted in the summary.
Step 3: Quantify Dollar Exposure
Aggregate the risk:
- Total retail value at risk and total cost exposure for Tier 1 and Tier 2 combined
- Estimate liquidation recovery at assumed markdown depths (e.g., 30% / 50% / 70% off) and the resulting margin loss vs. planned for the worst-tier SKUs
- Flag any SKU where cost exceeds likely liquidation recovery (i.e., selling below cost) as a write-down candidate
Step 4: Recommend an Action Per SKU
For each Tier 1 and Tier 2 SKU, assign one action with reasoning:
- Mark down now (specify depth: shallow 20–30%, deep 40–60%, clearance 70%+) — for aging SKUs with some residual velocity
- Bundle / promote — for SKUs with retail value worth protecting margin on
- Halt reorder / cancel on-order — where inbound units would compound overstock
- Liquidate / exit — for dead, end-of-lifecycle, or below-cost SKUs
- Hold & monitor — Tier 3 only, with the trigger that would escalate it
Sequence markdown depth to season timing: shallower earlier, deeper as end-of-season approaches.
Step 5: Build the Ranked Watchlist and Summary
Rank all flagged SKUs by cost exposure (highest liability first) so effort concentrates where the dollars are. Produce a top-level summary of total exposure, SKU counts per tier, and the single highest-priority action.
Output Format
- Structure: Executive summary → risk classification table (all flagged SKUs) → dollar exposure rollup → per-SKU recommended actions → priority watchlist
- Length: 700–1,100 words plus the table (table length scales with SKU count)
- Format: Prose summary, one primary risk table (SKU, WOH, weekly STR, forward coverage, tier, cost exposure, action), and a ranked action list
- Sections: Summary & Total Exposure → SKU Risk Table → Dollar Exposure Rollup → Recommended Actions by SKU → Ranked Watchlist
- Tone: Merchandise planning specialist — quantitative, decisive, action-first. Every flag ties to a number and a next step, never a vague concern.
Quality Checklist
Before delivering output, verify:
- [ ] WOH, weekly STR, and forward coverage are computed and shown for every flagged SKU
- [ ] Risk tiers use all three signals together — no SKU is tiered on weeks-on-hand alone
- [ ] Zero-velocity SKUs are labeled "No Movement," not given a numeric WOH
- [ ] Total cost exposure and retail value at risk are summed for Tier 1 + Tier 2
- [ ] Every Tier 1 and Tier 2 SKU has exactly one recommended action with reasoning
- [ ] The watchlist is ranked by cost exposure (highest liability first), not by SKU order
- [ ] Any default thresholds applied are stated explicitly
Notes
- Weeks-on-hand alone over-flags healthy slow-and-steady core items and under-flags seasonal SKUs that are fine today but cannot clear before season-end — forward coverage vs. season remaining is what catches the second case.
- Cancelling on-order units is frequently the highest-ROI action available and is easy to miss when analyzing only current on-hand inventory; always ask for inbound units when possible.
- For end-of-season analysis, weight liquidation recovery over margin protection — carrying cost and next-season fixture space usually outweigh holding out for full price.
- Recommended cadence: run weekly during peak season and monthly for core replenishment lines, escalating Tier 3 SKUs as their velocity or coverage triggers fire.
How to use this skill
This file is a Claude Code skill in Anthropic's standard format — markdown with YAML frontmatter at the top.
Installing in Claude Code:
~/.claude/skills/<folder-name>/SKILL.md— auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects)<your-project>/.claude/skills/<folder-name>/SKILL.md— auto-loads only when working in that project (recommended for project-specific skills)
Restart Claude Code or open a new session to register.
Using in Claude.ai, ChatGPT, Gemini, or other AI tools:
- Drag this file into a new chat, or copy and paste its contents
- Send your task or request as your next message — the AI will apply the skill where it fits
For Claude Code skill details: https://docs.anthropic.com/en/docs/claude-code/skills