For seasonal products, use the automatic trend calculation to even out the demand forecast according to recent trends. The system calculates trend in a hierarchical order.
When you enable automatic trend calculation, the system calculates a trend factor by comparing the recent demand to that of the prior year, and then multiplies the current demand forecast by the automatic trend factor. Parameters set at the product level override those set at the buy line level. Parameters set at the buy line level override those set at the branch level.
For products with automatic trend calculation enabled, the system does the following, in this order:
Calculates the current demand forecast based on the as of date, and notes the number of days of sales history it took to meet the minimum days or minimum hits forecast parameters.
Determines the recent demand for the product, starting from the as of date and going back the number of days noted in Step 1.
Determines the product demand for the same period of time in the prior year, starting from 365 days before the as of date and going back the number of days noted in Step 1.
Calculates the trend factor by dividing the demand of Step 3 by the demand of Step 2 and subtracting the total from 1.
If the system-calculated automatic trend percentage is higher or lower than the Max Increase% or Max Decrease% set on the Auto Trend Percentage Maintenance screen respectively, then the system uses these values.
If the demand for step 3 is 0, the Demand Calculation Audit screen displays N/A in the Automatic Trend Factor field.
Produces a revised demand forecast by multiplying the current demand determined in Step 1 by the automatic trend factor.
Note: If the product uses non-seasonal forecasting or Auto Trnd is set to N on the Forecast Parameters screen the Demand Calculation Audit screen displays N/A in the Automatic Trend Factor field.
For example, the current demand based on the As of Date is 49 days. The recent demand for the product is 192.5 each. The product demand for the same period the previous year is 166.1 each. The system calculates the trend factor as follows: (1 - (166.1 / 192.5)) = 13.71 or 13.71%. For information on auditing demand, see Auditing Demand Calculations.
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