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Forecasting Process

Running a Forecast

Once the forecast hierarchy is determined, click "Run Forecast" to commence the forecasting process.

The Forecast Settings opens with the following options:

  • Aggregation Type: Select either top-down or middle out to select the type of aggregate forecasting process. See below to understand how the different options produce a forecast.
  • Bucket Type: Select monthly or weekly buckets - we recommend choosing a single bucketing method consistently.
  • Forecasting Level: If top down is selected, only this option may be selected. If middle out is selected, this will be the top forecasting level.
  • Bottom Forecasting Level: If middle out is selected, this will be the bottom forecasting level.

If Top-Down is selected, the forecast at an upper level of the hierarchy will superimposes the shape of the aggregate forecast down to the item by the weighted distribution of the items history within the context of the top level. For example if an item makes up 20% of the overall history of the customer, the items forecast will be 20% of the overall customer forecast. You will notice in the image below.

  • The Middle-Out approach is the best of both worlds since the overall shape of the aggregate forecast is combined with the shape and trend of the item level forecast. Though the middle-out approach takes longer to process since it is running twice the numer of forecasts, we recommend it due to it generating the best possible forecast.

Once the options are selected, click "Run Forecast" to commence the forecasting process. The process runs the statistical forecasts, drives the forecasts down to the item level, sums up forecasts at each level of the hierarchy, calculates sales dollars and average sales prices as well as calculates performance metrics.

Helpful Information

The time required to generate the demand plan is dependent on numerous factors including the number of customers, levels, and items being forecasted.

Please note that the forecast UI only presents the forecast results and the measures related to forecast. Any overrides to the forecast values will be performed in the Demand Planning section.

Access to the Forecast tab may be managed via permissions. We recommend only providing access to personnel who are responsible for generating and evaluating statistical forecasts.

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