Inventory Forecast – Manual Creation

    This post goes through the manual forecast creation process. This also covers the forecast consumption. We will try to create sales order demand and see how the forecast consumption is affected by this demand.

Forecast consumption replaces forecasted demand with actual sales order demand. Each time you create a sales order line, you create actual demand. If the actual demand is already forecasted, the forecast demand must be decremented by the sales order quantity to avoid counting the same demand twice.

The Planning Manager is a background concurrent process that performs automatic forecast consumption as you create sales orders.

Forecast consumption relieves forecast items based on the sales order line schedule date. When an exact date match is found, consumption decrements the forecast entry by

the sales order quantity. Other factors that may affect the forecast consumption process are backward and forward consumption days and forecast bucket type

 

  1. Create a test item

    Go through Define Item for more details

     

  2. Associate cost and price to the item

    Go through Item Costs and Item Price for more details

     

     

     

  3. Define a Forecast Set and Forecast for this Item. Enter the forecast as follows

     

Date

Quantity

14-JAN-2014

2

15-JAN-2014

1

 

 

Create a Forecast Set TSTFCSTS1

Notice that we have checked the consume checkbox. So consumption will be automatic.

Outlier Update percentage – Maximum percent of the original forecast that a sales order can consume. This is generally 100 unless there is a promotion going on. In case of promotion you do not want a promotion order to consume the entire forecast. So you may have value less than 100.

Forward and backward days describe the number of work dates from the sales order schedule date that forecast consumption looks backward or forward for a forecast entry to consume. Non – workdays are not counted in these calculations.

Consumption days are used when an exact match between the sales order dates and the forecast dates is not found, or when a match is found and the quantity is not sufficient

to cover the sales order quantity. In both of these situations, consumption first moves backwards in workdays, looking for a forecast quantity to consume. If that search is unsuccessful, consumption moves forward in workdays. If a suitable forecast entry to consume is still not found, or the sales order quantity has not been completely consumed, an overconsumption entry is added to the forecast set. Overconsumption entry has a zero original quantity and a negative current quantity equal to the unconsumed demand.

 

 

 

    Note that the Current and Original quantity are same indicating that there are no consumptions

 

  1. Create a sales order (Sales order demand should ultimately consume the forecast demand)

    Note that the Request Date of the order is 14-JAN-2014 and quantity is 2.

 

  1. Navigate back to Forecast screen to check whether the sales order has consumed the forecast entries on 14-JAN-2014

     

     

    Current quantity is reduced to 0 from 2 indicating that quantity 2 is consumed by sales order.

    Click on consumptions to check the sales orders affecting the consumption.

     

        You can also view bucketed version of the forecast. This is nice as on any day(or bucket) you can view what is the forecasted quantity upto that point and how much of it is consumed and how much is available.

     

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