Maintaining Life Profiles

This chapter provides an overview of life profiles, list common elements, and discusses how to:

• Define life profiles.

• Recalculate life profile weights.

• Calculate forecasts with life profiles.

• Inquire about life profiles.

• Delete life profiles.

Understanding Life Profiles

Life profiles are sets of characteristics that you apply to forecast items that follow a predefined pattern of use. When you use life profiles, you guide items assigned through their life cycle using an expected total life volume for each profile item and a set of weights for each period in the item's duration.

PeopleSoft Demand Planning predicts demand for a set of items using different methods. The system processes each method using different elements of the PeopleSoft Demand Planning system. Methods include:

• Product introduction.

  The product does not have previous forecast demand, but it is expected to be a long-term product. The challenge for this type of demand prediction is setting the stock levels based on an eventual level of sales. Use PeopleSoft Demand Planning's Event Management feature to manage this method.

• Retirement.

  The system phases out the product until its stock is depleted. Use forecast adjustments to manage the retirement method of demand prediction.

• Full-life.

  The product has known start and end dates. You can predict the duration for this method with relative accuracy, and an expected volume is predicted. Use the Life Profiles feature to manage the full-life method.

  Full-life profiles determine the forecast of products that follow a predefined pattern from their introduction through their obsolescence. Using the profile, you have a basis for forecasting for the item. For example, you can base future statistical item forecasts on the new item's total expected life volume. Full-life profiles assume a zero forecast before the profile begins and after the profile ends.

You create profiles manually or derive them from actual results of other similar products and then apply the total volume to determine a forecast for the life of the product. You can also add products to a life profile that may have a statistical forecast that the system calculated using another forecasting method. After you associate a product with a life profile, all statistical history for that product is deleted, including the mean absolute deviation (MAD), smoothed average deviation (SAD), and standard deviation information.

You calculate new statistical information using the contributing item's results when recalculating profiles, or during period-end forecast calculations.

The system does not use forecasting models to determine the future forecast of a life profile product. Instead, it determines the future forecast entirely from the weights that are provided on the life profile and the total expected volume for the product over its life cycle. Although functions such as seasonality profiles, filtering, and de-promotion of events are still computed, a life profile item can have only one possible forecast, which is determined by a different set of mathematical calculations than standard forecast items.

When you attach items to life profiles, you create an instance of the life profile. Each item, called a profile item, is an instance. Life profiles are associated with a view and level, and include a duration. The system stores life profiles in the DP_LIFEPROFILES record and stores instance data in the DP_LPINSTANCES and DP_LPINST_LINES records.

Weights predict the percentage spread for each period of a full-life item's total expected life volume. Volume revision periods are the number of periods during which you do not want the system to revise the expected life volume. When these revision periods are equaled or exceeded, the system measures the percentage that is predicted by the life profile weights against the total adjusted demand, and if necessary, adjusts the expected life volume value to bring it more in line with the adjusted demand. Volume revision periods reside on the DP_LPINSTANCES record.

When you create an instance of the life profile, include:

• When the profile begins for the item.

• The total expected volume for the life of the item.

• Volume revision periods for the item.

This section discusses:

• Life profiles and seasonality profiles.

• Life profiles and events.

• Life profiles and period-end processing.

• Period-end processing variables.

• Life profile weight recalculation.

Life Profiles and Seasonality Profiles

You normalize life profile weights when you maintain the profile. Normalizing is spreading the weights over the entire duration of the profile to add up to a total of one. If a forecast item has a seasonality group profile as well as a life profile assigned to it, the life profile weight is further deseasonalized when you calculate the forecast using the seasonality profile.

See Also

Displaying Forecast Item Seasonality Profiles

Life Profiles and Events

In some business scenarios, you might want to associate forecast items with both life profiles and events that affect the forecast. Make sure that any events that you create for a life profile are within the life profile's duration. If the event covers periods outside of the life profile's duration, the system makes a forecast adjustment that is not related to the life profile.

Life Profiles and Period-End Processing

When calculating the forecast, the system uses life profile parameters to update the forecast for life profile items during period-end processing. Then, it determines the forecast by multiplying the total expected volume by the life profile weight for the appropriate period.

During period-end processing, the system:

1. Establishes the first period-end processing run that occurs after a life profile, regardless of whether the profile is active.

2. Calculates the statistical forecast.

3. Sets the calculation type to No Calculation.

Note. You must initialize life profile instance records before making any forecast adjustments or calculating accumulated life-to-date values. If you do not, the adjustments might be lost during the forecast calculation. The system initializes the forecast information automatically, which includes prorated values and any necessary forecast adjustments, after you set up the instance. This can occur before the instance's life actually starts if you set up the life profile in advance.

The next activity for a profile item occurs during the first period-end processing run that it encounters once the life profile is live (in other words, for the instance start period and year). During this period-end and all subsequent period-ends, the system accumulates incoming demand and adjusts the expected and projected values to date.

Period-End Processing Variables

Several period-end processing variations exist that depend on the forecast item calculation type and forecast method (model operation type) combination. This section describes those variations and discusses:

• Calculation type: No Calculation - life profile item.

• Calculation type: Best Fit or Reoptimize - life profile item.

Calculation Type: No Calculation - Life Profile Item

If a forecast item has a calculation type of No Calculation and a life profile item with a Y setting, three processing possibilities exist:

• If the life profile is not active yet, the system does not take any processing action on the forecast item, nor does it make updates.

• If the life profile is active and is within revision periods, the system updates the actual demand for the forecast item, accumulated adjusted demand, and projections to date stored on the profile instance record. The system does not recalculate the total life volume or weights.

• If the life profile is active and the number of revision periods has been exceeded, the system:

  1. Updates the actual demand for the forecast item.

  2. Estimates a new total life volume using the adjusted demand values to date.

  3. Updates the statistical forecast and all associated arrays using the new total life volume.

  4. Assesses the validity of the weights and generates messages if they are inaccurate.

When the revision periods are exceeded, the system checks the validity of the total expected volume and performs these calculations:

• SeasonallyAdjustedExpectedLifeVolume = Sum(LifeWeights(period) * (SeasonalityFactor (period) / 100)) for all periods.

• AccumWeightToDate = Sum(LifeWeights(period) * (SeasonalityFactor(period) / 100)) for all periods to date in the life profile.

• AccumDemandToDate = Sum(AdjustedDemand(period)) for all periods to date.

• NewTotalExpectedVolume = AccumDemandToDate / AccumWeightToDate * SeasonallyAdjustedExpectedLifeVolume for all periods to date.

If the absolute percentage change between the original total estimated volume and the new estimated volume is greater than or equal to the Life Change Threshold value that you define on the Reset page (select Define Forecast Elements, Control Groups, Define, Reset), the system generates the message- Estimated Volume change of nn% for item xxx.

See Archiving Views.

The system also measures bias to determine if the new demand has resulted in a biased forecast. If so, it generates the message: Bias in period nn for item xx,- check profile.

When the system recalculates the statistical and prorated forecast, it uses the new estimated volume for the future periods only (current to end of life) and updates the DP_FCITEMDATA record. As with other forecast methods, the adjusted forecast is also updated if previous manual adjustments have not been made to the forecast for that period.

The system also checks the new statistical forecast against the new expected volume to determine if the weights for the life profile are biased. The weights themselves are not adjusted; however, if the weights do not appear to be valid in the light of the actual demand, the system generates the message: Bias for Life Item xx,- check profile.

This is an example calculation for the expected life-to-date (LTD) volume, actual LTD volume, and projected volume LTD:

Projected Life Volume = Expected Life Volume + Actual Life Volume to Date − Expected Life to Date

In the next example, the expected life volume is 1000, the number of periods is three, and the weights are .25, .5, and .25.

Calculation Type: Best Fit or Reoptimize - Life Profile Item

If a forecast item has a calculation type of Best Fit or Reoptimize and is a life profile item, these processing types are available:

• If the life profile is active, the system treats the item as if the calculation type were No Calculation and, depending upon the life revision period status, performs the processing that is described in the last two examples in the previous table.

• If the life profile is not active yet, the system recalculates the statistical forecast using the weights and total life volume from the life profile instance, recalculates associated data, and sets the calculation type to No Calculation.

During processing, the system:

1. Calculates the statistical forecast for each period and determines the seasonally adjusted expected life volume.

   SeasonallyAdjELVTotal = Sum(LifeWeights(Period) * (SeasonalityFactor (Period) / 100)) for period = 1 to life duration

   StatisticalForecast(period) = ExpectedLifeVolume / SeasonallyAdjELVTotal * LifeWeights(period) * (SeasonalityFactor(Period) / 100)

2. Resets the prorated forecast to the statistical forecast, and resets the adjusted forecast to statistical if no adjustments were made in the period (ForecastAdjReasonCode = 0).

   ProratedForecast(Period) = StatisticalForecast(Period)

   If AdjReason = 0 then AdjustedForecast(Period) = StatisticalForecast(Period)

3. Accumulates the expected life volume to date and stores the total on the DP_LPINSTANCES record.

   LifeToDate(period) = Sum(StatisticalForecast(n) where n = 1 to period)

4. Recalculates the SAD and MAD values and stores them on the DP_FCITEMS record.

Note. Under normal circumstances, a forecast item defined as a life profile item should have a calculation type of Best Fit only when it is first set up and before the first period-end processes are run. However, if you apply weight calculation changes using the Recalculate Weights page, the system also computes the life profile and then changes the calculation type to No Calculation.

Life Profile Weight Recalculation

When recalculating weights for existing life instances, the system calculates the statistical forecast and its associated data in the same manner as during a period-end processing run, except that it uses new weights. If the forecast item has already passed its revision periods and the last period-end processing run has reestimated a new life volume, the weights are applied to this value.

This table lists the values that appear in the life profiles process weight calculations:

The deseasonalized adjusted demand is used as a basis for recalculating weights:

• DeseasonalizedDemand(Period) = AdjustedDemand(Period) / (SeasonalityFactor(Period) / 100)

• TotalDeseasonalizedDemand = Sum(DeasonalizedDemand(Period)) for l = 1 to n

For each item (j = 1 to m), calculate a set of new weights based on deseasonalized demand using this formula:

NewWeight(Period) = DeseasonalizedDemand (Period) / TotalDeasonalizedDemand for l = 1 to n

For each period, the system averages the newly calculated weights for each of the items to produce a new weight for the period using this formula:

LifeWeights(Period) = Sum(NewWeight(Period) for j = 1 to m) /Number of Items

This table shows an example for Period 1:

Common Elements Used in This Chapter

Defining Life Profiles

You create forecast items and views before creating a life profile, after which you can create instances and assign weights to each period. If you change an existing life profile, the system uses the new parameters for the profile items the next time it runs a period-end forecast. You can also use Calculate Forecasts in the Life Profiles feature to apply the new life profile parameters to a forecast.

Note. If the life profile that you are changing contains instances that also have normal events defined for them, you must first modify the event.

When you save life profile settings, the system:

1. Updates the DP_LIFEPROFILES record.

2. Sets the profile item's effective period and year to the start period and year of the life profile.

You cannot change the start date for a life profile instance that has already started. When you delete a forecast item instance or the entire life profile and its profile items, the system updates the forecast method to No Model and changes the calculation type to Best Fit on the DP_FCITEMS record.

This section discusses how to:

• Define life profiles.

• Set up life profile weights.

• View life profile details.

Pages Used to Define Life Profiles

Defining Life Profiles

Access the Life Profile Maintenance page. When you select a forecast item value, you can use the forecast item's full description or its short description to associate it with the life profile.

When you save the life profile, the system:

1. Sets the calculation type on each forecast item to Best Fit.

2. Sets the forecast item's Life Profile Item field to blank or to the name of the life profile.

3. Associates the life profile name with the forecast item.

4. Updates the DP_LIFEPROFILES record by:

   1. Creating the life profile instance and details.

   2. Creating the header and life profile weights.

5. Does not update the statistical forecast and adjusted forecast until it calculates the forecast or recalculates life profiles.

Setting Up Life Profile Weights

Access the Weights page.

You can update and recalculate weights by entering new values for any or all periods. The system uses the weights in determining the forecast for the items associated with the life profile instance. The system will calculate exact weights for you. After you make whole number entries, click the Normalize button to balance the weights across all the periods so that the total weight equals one. This saves you from having to enter values as decimals.

When you recalculate the weights for existing life instances, the system calculates the statistical forecast and associated data in the same manner as during a period-end processing run, except that the new weights are used. If the forecast item has already passed its revision periods and the last period-end processing run has reestimated a new life volume, the weights are applied to that value. The system stores weights on the DP_LPWEIGHTS record.

Viewing Life Profile Details

Access the Details page.

The total life profile by period information is display only. When you set up an item as a profile instance, fields on this page remain empty until you calculate a forecast or recalculate the life profile. If there is data in the forecast or demand fields on a new item, the system removes it when you save the life profile. The system stores the profile item data on the DP_LPINST_LINES record, and extracts statistical forecast and demand information from the DP_FCITEMDATA record for display only.

Recalculating Life Profile Weights

This section provides life profile calculation steps and discusses how to:

• Recalculate profile weights.

• Save weights to new life profiles.

Life Profile Calculation Steps

When PeopleSoft Demand Planning calculates life profiles, it:

1. Calculates the statistical forecast for each period and determines the seasonally adjusted expected life volume.

   The system stores the forecasts in the DP_FCITEM record. The system uses these formulas to make the calculation:

   • SeasonallyAdjELVTotal = Sum(LifeWeights(Period) * (SeasonalityFactor (Period) / 100)) for period = 1 to life duration.

   • StatisticalForecast(period) = ExpectedLifeVolume / SeasonallyAdjELVTotal * LifeWeights(period) * (SeasonalityFactor(Period) / 100)

2. Resets the prorated forecast to the statistical forecast, and resets the adjusted forecast to statistical if no adjustments were made in the period.

   The system uses these formulas to reset the forecast:

   • ProratedForecast(Period) = StatisticalForecast(Period)

   • If AdjReason = 0 then AdjustedForecast(Period) = StatisticalForecast(Period)

3. Accumulates the expected life volume to date and stores the total on the DP_LPINSTANCES record.

   The system uses this formula to accumulate expected life volume:

   LifeToDate(period) = Sum(StatisticalForecast(n) where n = 1 to period)

4. Recalculates the SAD and MAD values, and stores them on the Forecast Items master record.

Pages Used to Recalculate Life Profile Weights

Recalculating Profile Weights

Access the Recalculate Weights page.

The system uses weights to recalculate the statistical forecast for all items on the life profile that are not finished or for an instance that has not yet begun. To use contributing life profiles as a basis for recalculating other life profile weights, the profiles must have completed their life cycles and have actual demand for all periods of their lives.

Note. Use this page to define, review, and adjust weights. To apply the calculated weights to the life profile, use the Calculate Forecasts feature.

Profile Instances with Finished Lives

Contributors to a life profile are forecast items that are defined on the Life Profile Maintenance page as being contributors or forecast items that are part of the life profile and have life-end dates before the current forecast period. The list of possible contributing items appears in this group box.

Weights

Displays the period, weight, and new weight values. The Period and Weight fields are fixed. The system updates the New Weight field when you click the Calculate button. The corresponding graph shows the difference between the weights and new weight values.

Saving Weights to New Life Profiles

Access the Save New Life Profile page.

You must enter a new life profile name and a description to create a life profile. Click the Create this Profile button to create a new profile. Then use the Life Profile Maintenance page to associate forecast items to the new profile. The weights are already populated for the new profile; you must calculate new weights before you can access this page.

Note. Saving a life profile does not save the profile item to the new life profile because an item can only belong to one life profile at a time.

Calculating Forecasts With Life Profiles

Calculation of forecasts for life profiles is a two-stage process. First, you calculate life profile weights based on contributors to the profile set using the Recalculate Weights page. After reviewing and adjusting the weights, you actually apply the weights to items in the life profile. This calculates new statistical forecasts for each item of the life profile.

After a life profile's defined number of revision periods have passed, the system begins using the actual demand to adjust the total expected life volume at each period end. It generates the appropriate messages and adjusts both the statistical forecast and the projected volumes.

The system also tests the validity of the weights that were used initially for the life profile. The weights themselves are not adjusted; however, the system generates a message if the weights does not appear to be valid compared to the actual demand.

After a life profile has completed its life cycle, you can recalculate the weights process to use its actual demand combined with other life profiles to determine a set of weights for an existing profile.

This section discusses how to calculate life profiles.

Page Used to Calculate Life Profiles

Calculating Life Profiles

Access the Calculate Forecasts page.

Select the forecast view and life profile that you want to calculate. Also, use the Adjustment Reason Code field to select a user adjustment reason that the system uses to track changes made to demand. These codes identify recurring adjustments.

Inquiring About Life Profiles

This section discusses how to view inquiry details.

Page Used to Inquire About Life Profiles

Viewing Inquiry Details

The system stores the profile item data on the DP_LPINST_LINES record. It extracts statistical forecast and demand information from the DP_FCITEMDATA record.

See Also

Life Profiles and Seasonality Profiles

Deleting Life Profiles

This section discusses how to delete life profiles.

Page Used to Delete Life Profiles

Deleting Life Profiles

Access the Delete Life Profiles page.

When you delete life profiles, the system removes all life profile information and forecast items instances from the profile. The system changes the forecast items to Best Fit so that they are included as new items during forecast calculations.

To delete life profiles, the system:

1. Sets the calculation type on item instances to Best Fit.

2. Sets the forecast method to No Model.

3. Deletes the life profile name from the DP_FCITEM record.

4. Removes the life profile instance and detail.

5. Deletes the life profile and life profile weights.

6. Does not update the statistical forecast and adjusted forecast until it calculates the forecast.