Demand forecast

Here you will learn how to set up the planning subsystem to forecast external (sales forecasts) and internal (inventory consumption plans) demand for the whole enterprise, not by legal entities.

Demand forecast is the most realistic scenario of consuming finished products or enterprise goods.

This functionality is usually used in enterprises operating in the field with a dynamic demand structure. It is vital for such enterprises to adjust their production and purchase plans in accordance with changing demands. This functionality may not be relevant for enterprises that do not depend much on external demand or can reliably estimate their demand structure for the planning horizon of transactions.

Information about demand is usually used to generate a cleared demand after consuming inventory balances, production plans, kitting plans, and purchase plans. That is why the final demand forecast must be detailed up to the item.

To eliminate the noise factor due to the diversity and versioning of the same item, the product category is usually used as a main dimension of the primary forecast. Product categories group items with similar consumer properties. Product categories are very dynamic and change due to release of new item versions, introduction of new product lines, and other marketing activities. Later product category forecasts are detailed up to the item relevant at the forecast date.

As a rule, the Planning scenarios catalog records depend on the number of conventional combinations of external and internal factors of events. You can also use additional scenarios to switch from short-term plans (for example, weekly or ten-day period plans) to long-term plans (for example, monthly or quarterly plans).

Each scenario has an individual set of plan profiles. Each plan profile has its own data structure and its own rules to get data.

There are several ways to obtain forecast data, including:

• Get sales statistics of previous periods registered in the system.
• Get data from open orders registered in the system.
• Use mathematical forecasting services (import already available data).
• Expert valuation (enter data manually or import already available data).

As a rule, demand forecasts do not contain cost information. Cost estimates are usually required for financial budgeting. You can find the cost settings in the financial planning section.