This process is used to create forecasts of future demand per item/warehouse using automatic calculations. This process is performed every period, most suitably at the end, when demand history is complete.
This process can be started when the following prerequisites are met:
The steps below describe the activities included in the process.
Overview of forecast methods and parameters
The process is started when forecast methods are reviewed to determine whether they should be modified. This includes the selected parameters defined for each item/warehouse forecasted. In addition, if forecast simulation is used to generate new forecasts, then this activity includes reviewing the selected forecasting methods for this. See Create Forecast Simulation.
Automatic forecast calculations are performed for each item/warehouse having selected forecast methods based on automatic forecasting. This calculation can be made separately for groups of items/warehouses. For more information on conducting a forecast calculation, see Create Automatic Forecast.
In connection with the automatic forecast calculations, a forecast check is conducted. This involves checking the demand history on which the forecast calculation is based to make sure the values are reasonable and the forecasting errors for the calculated forecasts are within specified margins of error.
Items which do not meet the specified conditions for this check activate a forecast alarm. This means the item/warehouse is flagged with the alarm status.
The forecast values for alarm activated items can be corrected in two ways. Corrections can be made on-screen to each item in turn as described procedure Correct Alarm Activated Item.
Or, the alarm activated items can be printed as described procedure Print Alarm Activated Item. Using this printout, each item can be corrected in either 'Automatic Forecast. Open' (FCS001) or 'Manual Forecast/MDS. Open' (FCS350).
Before the automatic forecast is approved, it can be reviewed. For general forecasts, this can be done three ways. For items forecasted using forecast simulation, review is done differently.
First, the forecasted item can be printed as described procedure Print Item Forecast. This allows visual review and comparison of the forecasts to previous period results and/or consumption statistics. Totaling the forecasts per warehouse, item group or product group allows comparison of the item forecast to manually performed group forecasts or budget.
Second, forecasts can be compared to corresponding forecasts from previous periods or years. Forecast comparisons can be done separately for items, item groups, product groups, and forecast families.
This list shows more details on forecast comparisons:
Graphic presentations of separate item forecasts can also be reviewed as described procedure Display Forecast. Both forecasts and corresponding demand history can be displayed on-screen in this way. In addition, numerical comparisons can be made in 'Manual Forecast/MDS. Open' (FCS350).
Focus forecasting results can be printed for review per item. See Print Results from Forecast Simulation.
After review, adjusting the automatic forecast may be necessary. This can be done for each item/warehouse in user-defined buckets and period in one of two ways. The adjustments can be manually entered into the automatic forecast calculation in 'Automatic Forecast. Open' (FCS001) or an overriding full manual forecast can be entered in 'Manual Forecast/MDS. Open' (FCS350).
A number of items can be adjusted at the same time by changing the percentage or quantity values in relation to the automatic forecast calculation. See Create Forecast Adjustment.
The final activity in the process involves approving the forecast values after they are checked and reviewed, and any adjustments made. Approval is made by management but does not require updating any files. The forecast printout can be used as the formal approved forecast.