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<ManualTopic ID="/baanerp/wh/onlinemanual/000005" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">To calculate demand forecast for each period</Title>
		<Keyword><Level1>demand forecast</Level1>
			<Level2>calculate</Level2>
		</Keyword>
		<Keyword><Level1>calculate</Level1>
			<Level2>demand forecast</Level2>
		</Keyword>
	</Header>
	<AimSection><Paragraph>For planning purposes, it is important to have information on the expected demand for items. It takes much effort to determine the logistic parameters in order to analyze the expected demand.</Paragraph>
	</AimSection>
	<GeneralSection><SectionTitle>Define forecasting methods</SectionTitle>
		<Paragraph>There are many methods of forecasting. In the <GUIRef href="/baanerp/wh/ina/whina2100m000" role="session">Forecast Methods (whina2100m000)</GUIRef> session you can tailor the existing forecast methods. In the <GUIRef href="/baanerp/wh/wmd/whwmd4100s000" role="session">Item - Warehousing (whwmd4100s000)</GUIRef> session, the forecast method must be defined per item.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>Calculate the demand forecast by item</SectionTitle>
		<List><ListIntro>To calculate the demand forecast by item, run the <GUIRef href="/baanerp/wh/ina/whina2202m000" role="session">Calculate Demand Forecast (whina2202m000)</GUIRef> session. As a result of the analysis, the following parameters can be adjusted based on the actual usage of items:</ListIntro>
			<ListItem>Expected annual issue</ListItem>
			<ListItem>Safety stock</ListItem>
			<ListItem>Reorder point</ListItem>
			<ListItem>Forecast demand</ListItem>
		</List>
		<Paragraph>This information can be printed on a list (in the same session). The information describes the calculation base for the reorder point.</Paragraph>
		<List><ListIntro>Calculation of demand forecast for each item and period depends on the value of the <GUIRef href="/baanerp/wh/wmd/whwmd4100s000#whwmd400.cfmd" role="formfield">Forecast Method</GUIRef> field in the <GUIRef href="/baanerp/wh/wmd/whwmd4100s000" role="session">Item - Warehousing (whwmd4100s000)</GUIRef> session:</ListIntro>
			<ListItem><GUIRef href="/baanerp/tc/domains/fmod#mov.aver" role="enum">Moving Average</GUIRef>
			</ListItem>
			<ListItem><GUIRef href="/baanerp/tc/domains/fmod#exp.smooth" role="enum">Exponential Smoothing</GUIRef>
			</ListItem>
			<ListItem><GUIRef href="/baanerp/tc/domains/fmod#cons.pryr" role="enum">Previous Year's Calculation</GUIRef>
			</ListItem>
			<ListItem><GUIRef href="/baanerp/tc/domains/fmod#last.per.dem" role="enum">Last Period's Demand</GUIRef>
			</ListItem>
		</List>
	</GeneralSection>
	<GeneralSection><SectionTitle><GUIRef role="enum" href="/baanerp/tc/domains/fmod#mov.aver">Moving Average</GUIRef></SectionTitle>
		<Paragraph>If the forecast method is <GUIRef href="/baanerp/tc/domains/fmod#mov.aver" role="enum">Moving Average</GUIRef>, the demand forecast is calculated as follows:</Paragraph>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">demand forecast = (demand + actual item issue/seasonal factor [for the relevant periods])/number of periods
</Paragraph>
		</Formula>
	</GeneralSection>
	<GeneralSection><SectionTitle><GUIRef href="/baanerp/tc/domains/fmod#exp.smooth" role="Enum">Exponential Smoothing</GUIRef></SectionTitle>
		<Paragraph>If the forecast method is <GUIRef href="/baanerp/tc/domains/fmod#exp.smooth" role="enum">Exponential Smoothing</GUIRef>, the demand forecast is calculated as follows:</Paragraph>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">demand forecast = average demand(curr. period) + trend factor(curr. period) * seasonal factor(curr. period)
</Paragraph>
		</Formula>
		<List><ListIntro>Where:</ListIntro>
			<ListItem>Average demand is calculated as: forecast demand (prev. period) + <GUIRef href="/baanerp/wh/ina/whina2100m000#whina200.smff" role="formfield">Smoothing Factor for Demand Forecast</GUIRef> (curr. period) * actual usage (prev. period) - forecast demand (prev. period)) / seasonal factor (prev. period)</ListItem>
			<ListItem>Trend factor is calculated as: trend factor (prev. period) + <GUIRef href="/baanerp/wh/ina/whina2100m000#whina200.smff" role="formfield">Smoothing Factor for Demand Forecast</GUIRef> (curr. period) * [average demand (curr. period) - average demand (prev. period) - trend factor (prev. period)]</ListItem>
			<ListItem>Seasonal factors are defined.</ListItem>
			<ListItem>The smoothing factor is defined, in some cases corrected for <GUIRef href="/baanerp/wh/ina/whina2100m000#whina200.ctsi" role="formfield">Critical Tracking Signal Factor</GUIRef> in the <GUIRef href="/baanerp/wh/ina/whina2100m000" role="session">Forecast Methods (whina2100m000)</GUIRef>.</ListItem>
		</List>
	</GeneralSection>
	<GeneralSection><SectionTitle><GUIRef role="enum" href="/baanerp/tc/domains/fmod#cons.pryr">Previous Year's Calculation</GUIRef></SectionTitle>
		<Paragraph>If the forecast method is <GUIRef href="/baanerp/tc/domains/fmod#cons.pryr" role="enum">Previous Year's Calculation</GUIRef>, the demand forecast is identical to <GUIRef href="/baanerp/tc/domains/fmod#mov.aver" role="enum">Moving Average</GUIRef>, except that the number of periods to take into account is different.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle><GUIRef role="enum" href="/baanerp/tc/domains/fmod#last.per.dem">Last Period's Demand</GUIRef></SectionTitle>
		<Paragraph>If the forecast method is <GUIRef href="/baanerp/tc/domains/fmod#last.per.dem" role="enum">Last Period's Demand</GUIRef>, the demand forecast is calculated as follows:</Paragraph>
		<Formula><Paragraph UserLevel="Novice" UserType="Taskuser">demand forecast = average demand (curr. period) * seasonal factor (curr. period)</Paragraph>
		</Formula>
		<List><ListIntro>Where:</ListIntro>
			<ListItem>Average demand is calculated as: actual item issue (prev. period) / seasonal factor (prev. period)</ListItem>
			<ListItem>Seasonal factors are defined.</ListItem>
		</List>
	</GeneralSection>
	<GeneralSection><SectionTitle>To update the inventory parameters globally</SectionTitle>
		<Paragraph>To modify and update the formulas that SSA ERP uses to calculate, for example, the reorder point, use the <Link href="/baanerp/wh/ina/whina2200m000" role="session">Global Update of Inventory Parameters (whina2200m000)</Link> session.</Paragraph>
	</GeneralSection>
	<GeneralSection><SectionTitle>To calculate the Economic Order Quantity (Camp)</SectionTitle>
		<Paragraph>Use the <Link href="/baanerp/wh/ina/whina2201m000" role="session">Calculate Economic Order Quantity (Camp) (whina2201m000)</Link> session to calculate the <Link href="/baanerp/tc/glossary/glossary#000060" role="glossary">economic order quantity</Link> according to the Camp formula.</Paragraph>
	</GeneralSection>
</ManualTopic>
