Entering Forecast Parameters for Products

Forecast parameters filter transactions to determine product demand so that the demand forecast is accurate. Forecast parameters define boundaries for how the system suggests when to replenish products in your warehouse. For example, based on the product history, the system uses the settings you define to determine how much you need to keep on hand to fulfill expected sales.

Forecast parameters are set at the product, branch, or buy line level. Set forecast parameters at the product level to override settings at the branch or buy line level. Assign forecast parameters at the product level to filter demand, set the forecast method and forecast period, and to calculate a product's economic order quantity (EOQ).

Note: The following procedure is a manual process for a single product. Use the Mass Load program to enter inventory parameters to groups of products.

To enter forecast parameters for a product:

From the Maintenance menu, select Product to display the Product Maintenance window.
Display a product record.
From the Inventory menu, select Primary Inventory Maintenance to display the Primary Inventory Maintenance dialog box.
From the Edit menu, select Forecast Parameters to display the Product Forecast Parameters dialog box.
From the File menu, select Hierarchy to display the Product Forecast Parameters dialog box.
In the Enter hierarchy branch field, enter the branch or territory ID.
Click OK to display forecast parameters for the selected branch in the Product Forecast Parameters dialog box.
Complete the following fields:

To...	Use this field...
Whether the system uses the standard or median forecasting method for this product. If left blank, the default is standard.	Forecast Method
Whether the product sells more at certain times of the year than at other times. Select Demand Parameters from the File menu to define the forecast period parameters.	Seasonal
The maximum number of days in the forecast period that the system uses to increase an item's raw demand to compensate for lost sales of a product.	Lost Sales
The exceptional sales percentage for the product. The system eliminates from demand forecasting any sale exceeding the percentage difference between the two largest sales in the forecast period.	Exceptional Sales %
The positive or negative percent to change the calculated demand forecast in anticipation of a trend increasing or decreasing the demand. Note: You can enter negative numbers, if needed, such as to account for declining sales on a buy line.	Trend %
Enter the backorder tolerance quantity above which a hit is not included in the demand forecast calculation.	BTQ
Enter the minimum number of most-recent purchase orders the system samples to calculates the lead time for the product.	Minimum Lead Factor
Define how the system calculates lead time for the product: If greater than 0 (zero), this is the maximum number of most-recent purchase orders the system samples to estimate the lead time for the product. If 0 (zero), the automatic calculation of lead time for the product is turned off and the system uses the value of Lead Days for the lead time. If null (blank), the system uses the lead factor set for the product's buy line. Note: Seasonal products use a lead time calculated for the season.	Lead Factor
The lead time for the product. This field updates when Lead Fctr is greater than 0 (zero).	Lead Days
The theoretical cost of reordering and restocking a single item, used in calculating the EOQ.	EOQ $
The carry cost percentage used in calculating the EOQ of this item.	EOQ %

Save the information and exit the dialog box.

Changes take effect when you exit Product Maintenance.

More Options for the Product Forecast Parameters Dialog Box

The Product Forecast Parameters dialog box also offers these options:

To...	Select this menu option...
Enter forecast period parameters	File > Demand Parameters The Product Demand Parameters dialog box displays.
Define minimum and maximum stocking levels and add service stock	Edit > User Control Parameters The Product User Control Parameters dialog box displays.
View the default cost for a product	Edit > Default Cost The Product Default Cost dialog box displays.
Adjust the product's lead time	Edit > Override Lead Time The Override Lead Time Maintenance dialog box displays.
View product availability and inventory information	Inquiry > Inventory Inquiry The Inventory Inquiry window displays.
Audit the demand calculation	Inquiry > Audit The Demand Calculation Audit dialog box displays.