Forecast

For each selected record, the batch job checks the Forecast method in the ABC Classification Parameter table using the Department Code, Unit Code and the ABC Class of the record:

• If the Forecast method is Manual, the record will be excluded from processing. This record will not be included in the Forecast Demand Exception Report as an exception.

• If the Forecast method is Seasonal or Non Seasonal, the Forecast Demand will be calculated for the record.

The batch Job calculates the Total Demand and Mean Demand for each of the selected records, immaterial of whether the Forecast method is Seasonal or Non-seasonal.  These values are used to arrive at the seasonal/non seasonal demand.

The Total Demand is calculated for the ‘number of months’ data available in the Inventory table.  This in turn is used to calculate the Mean Demand.

The number of months' data available in the Inventory table is calculated as follows:

• Retrieve the First Receipt Date of the Stock Item record from the Inventory table.

• The calendar month and the Fiscal Year of the First Receipt Date is considered as the first month for which data is available.

• The Difference between the month for which forecast demand has to be calculated (from step 1) and the month calculated above is considered as the number of months’ data available.

• When the Stock Item's First Receipt Date's Month is greater than the Reorder Month, the Reorder calculation process writes that Stock Item to the Exception report and excludes that stock item record from further processing. The message in the Report is “Calculation bypassed as the ‘Number of months’ available is less than zero". For Example: First Receipt Date is 8/10/01, Forecast Month from Parameter is 2 (February, 2002). The number of months for which previous issues is available is 6 (up to August 2001). The calculations will be done based on 6 months instead of 12 months.

The Total Demand is calculated as follows:

• Retrieve the number of months to be used for calculations from the ABC Classification Parameter table using the ABC Class for the selected record.

• Compare the number of months available in the Inventory table (calculated in the previous step) against the number of months specified on the ABC Classification Parameter table.

• • If Forecast Demand Quantity has to be calculated for period 'P', the Current Year Issue month prior to that month (that is, P -1) is considered as the first month of the specified number of months. Months prior to the first month (P -2, P-3 etc.) are considered as the second month and third month respectively until the specified number of months is reached.  If the specified number of months is not reached after all the months of the 'Current Year Issue' are considered, the 'Prior Year 1 Issue' month is considered.  For example, if the forecast demand has to be calculated for the month of October 2002 based on the demand for the previous 4 months, then September 2002 (Forecast Demand month of October 2002 less one) is considered as the first previous month of the specified number of months.   August 2002, July 2002 and June 2002 is considered as the previous months 2, 3 and 4 respectively.

  • If the number of months available is less than what is specified, the number of months is adjusted to the maximum available and the Total Demand calculated with the adjusted number of months. This information is displayed in the Forecast Demand Exception Report against the record.  “The number of months is readjusted to 'n' number of months as the number of months specified on the ABC Classification Parameter table are not available.”  For example, if the Number of months specified on the ABC Parameters table is 10 and the Prior Year Issue available on the Inventory table is only for 6 months then the Total Demand is calculated by taking into account the Prior Year issues for 6 months only. The fact that the calculations are done based on 6 and not 10 months is displayed in the INFC Report.

• Total Demand is calculated as the sum (total) of issued quantity for the number of months specified on the ABC Classification Parameters table or the total of issued quantity for the adjusted number of months (if the number of months have been adjusted.)

The Mean Demand is calculated as follows:

• Mean Demand is calculated as the Total Demand divided by the number of months specified on the ABC Classification Parameters table or the adjusted number of months (if the number of months have been adjusted.)

This event is performed by the batch job only if the forecast method for a record is Seasonal. The Mean Demand calculated as mentioned in the Non Seasonal method is multiplied by the Seasonal Ratio to arrive at the Forecast Demand.  The seasonal Ratio is calculated by comparing the month (corresponding to the forecast month) in the previous year with the rest of the previous year.

The batch Job retrieves the number of months for which the Previous Year Issue is available on the Inventory table for the selected record.  Based on the number of months’ data available (as calculated above) the Seasonal Ratio is calculated as follows:

• If the number of months available is <= 0, Forecast Demand will not be calculated. The record will be included in the Forecast Demand Exception Report.

• If the number of months is less than 13, Mean Demand is considered as the Forecast Demand.  The record is displayed in the Forecast Demand Exception Report with the message "Seasonal forecast method is not valid until at least one year of data can be accumulated to create the seasonal adjustment factor.  The forecast method used is Non-seasonal."

• If the number of months is greater than or equal to 13 but less than or equal to 24, then the Mean Demand is adjusted with the seasonal ratio based on a single year forecast. Seasonal ratio for a single year forecast is calculated as (Issued quantity for the corresponding period in Previous Year 1 divided by the total demand for Previous Year 1)* 12.   For example, if the seasonal forecast demand has to be calculated for the period October 2002, (Issued Quantity for the month of October 2001 divided by the Total Demand for Previous Year 1)*12 will be the seasonal ratio.

• If the number of months is greater than 24, then the Mean Demand is adjusted with the seasonal ratio based on a multi year forecast.  Seasonal ratio for a multi year forecast is calculated as (Issued quantity for the corresponding period in Previous Year 1 divided by the total demand for Previous Year 1 + Issued quantity for the corresponding period in Previous Year 2 divided by the total demand for Previous Year 2)* 6.   For example, if the seasonal forecast demand has to be calculated for the period October 2002, (Issued Quantity for the month of October 2001 divided by the Total Demand for Previous Year 1+ Issued Quantity for the month of October 2000 divided by the Total Demand for Previous Year 2)*6 will be the seasonal ratio.

• If the Total demand for the Previous Year(s) is 0, the seasonal ratio is 1.

Based on the Mean Demand and Seasonal ratio calculated in the previous events, the batch job calculates the Forecast Demand for each record as follows:

• If the Forecast method is "Non Seasonal”, the Mean Demand is considered as the Forecast Demand.

• If the Forecast method is "Seasonal", Mean Demand is multiplied by the seasonal ratio in order to calculate the Forecast Demand.

If the Forecast Demand Calculated has more than 5 decimal places, the Forecast Demand is rounded off to five decimals places before updating the Inventory table.

Forecast Demand Quantity is calculated for all records except when the First Receipt Date is blank or the Forecast Method is Manual on the ABC Classification Parameters table.  If the Forecast Demand Quantity is calculated for a record, than irrespective of the amount calculated or an exception associated with the record, the Inventory table is updated.  The batch job updates the current Forecast Demand bucket on the Inventory table with the calculated Forecast Demand for each record.

In addition to calculating and updating the forecast demand, the batch job generates a report called the Forecast Demand Exception (INFC) Report for exception records (records for which the Forecast Demand was not calculated or calculated with a different method/ number of months than specified for that record).