# Base Demand

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.

## Description

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