To calculate demand forecast for each period
For planning purposes, it is important to have information on the expected demand for items. It takes much effort to determine the logistic parameters in order to analyze the expected demand.
Define forecasting methods
There are many methods of forecasting. In the Forecast Methods (whina2100m000) session you can tailor the existing forecast methods. In the Item - Warehousing (whwmd4600m000) session, the forecast method must be defined per item.
Calculate the demand forecast by item
To calculate the demand forecast by item, run the Calculate Demand Forecast (whina2202m000) session. As a result of the analysis, the following parameters can be adjusted based on the actual usage of items:
This information can be printed on a list (in the same session). The information describes the calculation base for the reorder point.
Calculation of demand forecast for each item and period depends on the value of the Forecast Method field in the Item - Warehousing (whwmd4600m000) session:
All forecast methods use the demand figures of a number of preceding periods. When executing the demand forecast for future periods, the demand figures of preceding periods are not always available because the preceding periods can (partially) lie in future. In this case LN uses the calculated demand forecast of preceding periods instead of the actual demand figures.
The calculation and update of item ordering parameters (Expected Anual Issue, Safety Stock and Reorder Point) is always based on the forecast figure of the next future period.
If the forecast method is Moving Average, the demand forecast is calculated as follows:
demand forecast = (demand + actual item issue/seasonal factor [for the relevant periods])/number of periods
If the forecast method is Exponential Smoothing, the demand forecast is calculated as follows:
demand forecast = average demand(curr. period) + trend factor(curr. period) * seasonal factor(curr. period)
Previous Year's Calculation
If the forecast method is Previous Year's Calculation, the demand forecast is identical to Moving Average, except that the number of periods to take into account is different.
Last Period's Demand
If the forecast method is Last Period's Demand, the demand forecast is calculated as follows:
demand forecast = average demand (curr. period) * seasonal factor (curr. period)
To update the inventory parameters globally
To modify and update the formulas that LN uses to calculate, for example, the reorder point, use the Global Update of Inventory Parameters (whina2200m000) session.
To calculate the Economic Order Quantity (Camp)
Use the Calculate Economic Order Quantity (Camp) (whina2201m000) session to calculate the economic order quantity according to the Camp formula.