Forecasting Overview

Forecasting requires you to project the future requirements for an item based on your past usages of the item, sales predictions, etc. This topic describes how MRP and APS plan forecasts as independent requirements and how existing demands, such as customer orders, consume the forecasts.

Creating a Forecast

You create a forecast for a given item on the Forecast form. Enter the Original Quantity to specify the quantity you are forecasting a need for (the "demand quantity"). Enter the Forecast Date to represent the due date of the forecast. Enter the Warehouseto forecast for a specific warehouse. If you have elected to create independent requirements based on customer orders (see the Use Customer Order or Forecast help topics for more information). You can also specify a customer when creating a forecast.

About the Use CO or Forecast Planning Parameter

The Use CO or Forecast parameter on the Planning Parameters form determines whether the system plans forecasts and/or customer orders as demands/requirements. For example, if this parameter is set to Forecast, customer orders are not planned and the system uses the forecast's Original Quantity as the demand quantity instead of using the Outstanding Requirement. All examples in this help topic assume the Use CO or Forecast field is set to Both.

Caution: If the Use Co or Forecast parameter is set to Both, and you change either the Forecast Look Ahead or Forecast Look Behind parameter values, the system may reevaluate forecast consumption for all items, and this process may take a long time.

How Forecasts are Planned

When you initially create the forecast, the value in the Outstanding Requirement field equals the value in the Original Quantity field. Existing demands (such as customer orders entered before you run the MRP Planning or APS Planning activity) consume the forecast quantity from this Original Quantity value. The Outstanding Requirements value reflects the remaining forecast quantity that will drive independent requirements for planning (for both MRP and APS). See "How Existing Demands Consume the Forecast" below for details about which demands can consume the forecast quantity.

The process the system uses to plan forecast requirements is different depending on whether you are running MRP or APS.

MRP plans forecasts according to this process:

Plans the Outstanding Requirement quantity from forecasts (and quantities from other independent requirements, such as customer orders) for a given end item.
Searches for existing on-hand and receipts to satisfy the requirement.
Creates a planned order for the net requirement after on-hand inventory and planned supplies have been considered.
"Explodes" this net requirement from the planned order through the item's bill of material, creating the dependent requirements for the component materials.
See MRP Overview for more information.

Note: In CloudSuite Industrial (PROGRESS) MRP, the planning parameter "CO and Forecast On Line" updated the forecast consumption information automatically whenever you added, changed, or deleted a forecast or customer order. In CloudSuite Industrial (SQL), this functionality is in place by default (due to the SQL database table structure). For example, if you add a new forecast, that forecast will be visible immediately on reports and output forms without requiring you to rerun MRP.

APS plans forecasts according to this process:

Plans the forecast before or after planning other demands according to your APS order priority.
Allocates any available on-hand inventory and planned supplies (within Supply Usage Tolerance), further reducing the forecast quantity to be planned. Keep in mind that other demands such as customer orders will probably have priority over forecasts for using on-hand inventory and planned supplies, depending on how your order priorities are set.
Explodes, as required, the net requirement from the planned order through the BOM for this demanded quantity of the item.
Generates planned orders at all levels needed to satisfy the remaining forecast quantity. The forecasted item's planned order's Projected Date indicates the availability date of the forecast supply.

New incoming demands can use this forecast's supply only after the planning run is complete, when you incrementally plan them during a save or Get ATP/CTP process.

Note: If a demand consumes a forecast, any subsequent Get ATP/CTP process you perform on that demand will consider this consumption of forecasted supply in the calculation of the Projected date.

Example

For this example, assume these conditions:

On-hand inventory: 150
Forecast-XYZ Original Quantity: 200
Priority for customer orders on the APS Order Priority form is set so the system plans customer orders before it plans forecasts.

You enter a customer order for a quantity of 120. The customer order consumes the forecast (assume the customer order is due within the Forecast Look Behind/Ahead window). The forecast's Outstanding Requirement is reduced to 80.

You then run APS Planning. The system first plans the customer order demand. It allocates the on-hand inventory to the customer order, satisfying the order and leaving a remainder of 30 on hand. Then the system plans the forecast demand. It allocates the remaining 30 from inventory and generates a planned order for 50 to satisfy the remaining forecast demand.

How Existing Demands Consume the Forecast

The Forecast Look Behind and Forecast Look Ahead parameters specified on the Product Codes form and/or on the Planning Parameters form set up a time window within which existing customer orders and other demands can consume a forecast. The system uses this window when searching for a forecast to place a customer order against. The search for a forecast works as follows:

The system tries to locate a forecast for the same date as the demand's due date. The system ignores old forecasts if the Forecast Date is more working days into the past than the current date + the Forecast Look Behind value.
If a forecast matching the demand's due date does not exist or is already consumed (an Outstanding Requirement equal to zero), the system starts at the demand's due date minus Forecast Look Behind and searches for a forecast up to the demand's due date plus Forecast Look Ahead.
If the system finds a matching forecast, it checks whether the forecast is already consumed. If the forecast has been consumed, the system locates the next valid forecast.
If the demand quantity is greater than the Outstanding Requirement, the system sets the Outstanding Requirement to zero, and applies the remaining demand quantity to the next valid forecast. If the system does not find a valid forecast, the demand does not consume any forecasts.
On the Forecast form, Customer and Warehouse are optional forecast fields that also influence the process by which demand is matched to a given forecast. The search is performed in this order:
1. On Warehouse only when Customer is null
2. On Customer and Warehouse
3. On Customer only when Warehouse is null
4. On forecast records when Customer and Warehouse are both null

Example

For this example, assume these conditions:

Forecast Look Ahead: 7

Forecast Look Behind: 4

Forecasts for:

50, due 10/1

60, due 10/5

50, due 10/9

50, due 10/13

Customer orders (COs) for:

20, due 9/20

20, due 9/25

10, due 10/2

15, due 10/5

30, due 10/15

25, due 10/17

For the CO on 9/20: there is no forecast for 9/20, so searching starts from 9/16 through 9/27. No forecast is found, so this CO does not consume a forecast.
For the CO on 9/25: there is no forecast for 9/25, so searching starts from 9/21 through 10/2. There is a forecast for 10/1. The system subtracts 20 from Outstanding Requirement, leaving 30.
For the CO on 10/5: there is a forecast for 10/5. The system subtracts 15 from Outstanding Requirement, leaving 45.
For the CO on 10/15: there is no forecast for 10/15, so searching starts from 10/11 through 10/22. There is a forecast for 10/13. The system subtracts 30 from its Outstanding Requirement, leaving 20.
For the CO on 10/17: there is no forecast for 10/17, so searching starts from 10/13 through 10/24. There is a forecast for 10/13. The system subtracts only 20 from the Outstanding Requirement because that is all that remains. The remaining five are subtracted from the next available forecast.