Base demand is a calculated demand normalized from actual demand corrected for seasonal and period length variations. Actual demand is also corrected with any manual forecast adjustments. Non-representative demand is also excluded.

Base demand is used in calculating base forecasts.

**Base Demand Calculation**

The following formula is used to calculate base demand.

D(i) = ((Dr(i) - M(i)) / (L(i) / (Ln * 12 / p)) / S(i)

**Key:**

D(i) | = | Base demand during period (i) |

Dr(i) | = | Actual demand during period (i) |

M(i) | = | Manual forecast adjustment for period (i) |

L(i) | = | Number of workdays in period (i) |

Ln | = | Average number of workdays per month |

S(i) | = | Seasonal index for period (i) |

i | = | Period number |

p | = | Number of periods per year |

Assume the following demand data for an item.

Actual demand Nov. 95 | 119 |

Manual forecast adjustment Nov. 95 | 10 |

Seasonal index Nov. 95 | 1.15 |

Number of workdays in Nov. 95 | 21 |

Average number of workdays per month | 19 |

Number of periods per year | 12 |

The following base demand is calculated for November 1995.

D(Nov.) = ((119 - 10) / (21 / (19 * 12 / 12)) / 1.15 = (109 / 1.10) / 1.15 = 86.2