Confirmed forecast and unconfirmed forecast

This topic discusses the concept of confirmed and unconfirmed forecast, and presents an overview of the functionality.

For instructions on setting up the various options, refer to the following topics:

  • How to set up confirmed forecast (customer side)
  • How to set up confirmed forecast (supplier side)

For a description of the algorithm to determine which part of the total forecast is confirmed forecast, refer to How to determine the confirmed forecast

Reliability of the forecast to supplier

If you use vendor managed inventory (VMI) and the supplier plans the supply on behalf of the customer, the supplier can plan based on forecast received from the customer.

The customer can differentiate between confirmed and unconfirmed forecast:

  • confirmed forecast

    The part of the total forecast for which the customer confirms that this part will be consumed.

    Typically, confirmed forecast is derived from actual sales orders, sales schedules, and so on.

  • unconfirmed forecast

    The part of the total forecast for which the customer is unsure whether this quantity will be needed.

The sum of the confirmed forecast and the unconfirmed forecast is called total forecast. Usually, the total forecast includes the demand based on actual sales orders for the customer's end products and forecast demand based on estimated future sales.

To use unconfirmed forecast

If you differentiate between confirmed forecast and unconfirmed forecast, you can choose whether the supply planning is based on the confirmed forecast or on the total forecast.

With confirmed supply

If the VMI supplier sends the customer messages with the confirmed supply that the customer can expect to receive, the supplier can calculate the confirmed supply based on Total Forecast or Confirmed Forecast.

In both cases, the supplier bases the supply planning on the confirmed supply.

Without confirmed supply

If the supplier does not send the customer messages with the confirmed supply that the customer can expect to receive, the supplier can base the supply planning on Total Forecast or Confirmed Forecast.

If the planning is based on Total Forecast, the supplier can base the replenishment on Total Forecast, Confirmed Forecast. If the planning is based on Confirmed Forecast, the replenishment can be based on Confirmed Forecast. In both cases, you can handle the replenishment also completely manually.

Item supplier plan and item customer plan

In the item supplier plan and the item customer plan, LN displays the Total Demand field and the Confirmed Demand field in adjacent columns. LN also displays the Planned Avail. (Total) and the Planned Available (Confirmed) fields, which show whether the supplier can prevent inventory shortages. A negative planned available quantity indicates a projected inventory shortage.

If the VMI supplier cannot fill the total forecast, the item plans shows whether the supplier can at least cover the confirmed forecast.

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