Budget Adjusted Trend Forecast Method
This forecast method creates top-down forecasts as part of the Budget Management module. This method compares the trend of this year’s actuals against this year’s budget. The method forecasts sales and AHR by multiplying a calculated baseline by the calculated trend. A forecast is created for one week at a time. Note: the method forecasts each week in chronological order. The method uses the forecasted data from one week to forecast data for a later week. The method uses the following data:
| Data | Origin |
|---|---|
| sales drivers | Point-of-sale data daily data in the SO_RESULTS_SUMMARY table from LFSO. |
| AHR forecasts | AHR historical weekly data in SO_RESULTS_SUMMARY that is automatically averaged to weekly values. |
| budget values | An imported reference budget stored in the FCST_ITEM table. |
This forecast method uses the Budget Adjusted Trend algorithm to calculate the forecasted values.
This algorithm:
- Uses a weighted average of budgeted sales for the current and upcoming weeks to calculate the sales baseline for a specific week.
- Uses the ratio of the weighted average of this year’s actual or forecasted sales to the weighted average of this year’s budgeted sales to calculate the sales trend for a specific week.
- Multiplies the sales baseline by the sales trend to calculate the forecasted sales.
- Uses a weighted average of actual AHR for the current and previous weeks to calculate the AHR baseline for a specific week.
- Uses the ratio of the weighted average of this year’s actual or forecasted AHR to the weighted average of this year’s budgeted AHR to calculate the AHR trend for a specific week.
- Multiplies the AHR baseline by the AHR trend to calculate the forecasted AHR.
See Budget Adjusted Trend Algorithm.
The application stores the forecasted values in the FCST_ITEM table in the database.