Reconciling Forecasts

This chapter provides an overview of forecast reconciliation and discusses how to:

Define collaboration templates for reconciling forecasts.
Establish user-adjusted forecast details.
Reconcile forecasts through collaboration.
Defining forecast reconciliation specifications.
Use the Reconciliation Workbench.

Understanding Forecast Reconciliation

Forecast reconciliation is the collaboration of user-adjusted forecasts to arrive at an integrated set of forecast values. PeopleSoft Demand Planning uses a series of features that enable you to use multiple forecasts, where different forecast users can each have their own forecast, in the creation of a reconciled forecast that is more realistic and accurate for an organization.

Forecast reconciliation begins with a user-adjusted forecast that has been through period-end processing. Using fields from the forecast view, you can start making comparisons and reconciling the forecast. Make sure you select the Used for Collaboration check box on the Define Adjustment Templates page so that the template can be selected from the various workbenches and specifications you work with to reconcile a forecast.

To reconcile a forecast:

Create an adjustment display template.

Collaborative templates are a type of display template that the system uses in conjunction with reconciling forecasts. You use the template to assign user-adjusted fields from a forecast view and level.
(Optional) Set up user preferences to include collaborative templates.

These preferences define settings and certain updates for workbenches and inquiries.
(Optional) Review collaboration items.

You use the Collaborate Forecast feature to perform the review during which you can compare differences between the adjusted forecast and user forecasts for individual items. Different people, such as planner or customers, can have their own forecast. After creating and tuning the forecast, they can reconcile their forecasts to arrive at a consensus for the best forecast.
Maintain user-adjusted forecast details.

This feature provides a means for the system to calculate forecast error values and weights applied to each user-defined forecast field. The forecasts can be weighed by how accurate each forecast has been in the past. You can also adjust the weights manually.
Set up a reconciliation specification.

You use the specification to define the collaborative template, processing parameters, and work with assigned field weights. When the system runs the Forecast Reconciliation (DP_VWRECON) process, it use the values you set up in the specification.
Run the Forecast Reconciliation process.

This process reconciles user-defined forecasts by using the predefined specification to create forecast adjustments based on the criteria you defined.
Use the Reconciliation Workbench to collaborate on forecasts on an item-by-item basis.

You can use the Reconciliation Workbench in conjunction with the Adjustment Workbench to work with changes to the forecasts.

Defining Collaboration Templates for Reconciling Forecasts

To set up user preferences, use the User Preferences component. To define adjustment formats, use the Adjustment Formats component.

A collaborative template is an adjustment display template that can also be used for reconciling forecasts. The template enables you to assign user forecast fields for a view and level and ultimately collaborate with other users to arrive at an adjusted forecast.

See Also

Adjusting Forecasts and Demand

Defining User Preferences

Pages Used to Define Collaboration Templates for Reconciling Forecasts

Page Name	Object Name	Navigation	Usage
Adjustment Display Templates	DP_ADJFORMATS	Demand Planning, Define Security, Adjustment Display Templates	Define collaboration templates for reconciling forecasts. Use this page to assign user forecast fields to a collaborative display template. Also, select the Used for Collaboration check box to indicate the template can be used for forecast reconciliation.
User Preferences	DP_USERPREFERENCES	Demand Planning, User Preferences	Assign a collaborative template to a forecast view and level and to define historic and future collaborative periods.

Establishing User-Adjusted Forecast Details

This section provides an overview of user-adjusted forecast and discusses how to calculate errors and weights for user-adjusted forecasts.

Understanding User-Adjusted Forecasts

The User-Adjusted Forecasts Details feature provides a means to calculate and maintain collaborative weights of user-adjusted forecast datasets and their associated error measurements. You can calculate an error value for each user-adjusted forecast for a selected level, which you can use to calculate individual weight values. You can manually adjust those weights for each user-adjusted forecast field in a particular forecast view and level.

The system stores weights and errors for adjusted forecast in DP_FCST00_yyy fields, and stores weights and errors for user-adjusted forecasts in their applicable numbered fields, such as DP_FCSTxx_yyy. The error for the adjusted forecast dataset is used for comparative weighting for the user-adjusted forecast datasets. You can maintain the weight for adjusted forecasts, but it is not recalculated in any other functions.

Error Calculations

You calculate errors in a similar manner as the MAPE (mean absolute percentage error updates) values currently being calculated. The user-adjusted forecast dataset is compared to the actual demand dataset for the calculation of an aggregate MAPE across all items for a forecast view and level. If the resulting error value is greater than 1.0000, then the system uses 1.0000.

During the calculation, the system uses the standard MAPE error calculation for the last historical periods and for each error value that it calculates, it totals those values for each item in that level of the view. That result is then divided by the total number of items in the collection. This provides an average error value for all items in a level of the forecast view. The process continues using first the adjusted forecast dataset as compared to the actual demand dataset, and then progresses through each of the user-adjusted forecast dataset that appear in the grid. If you calculate errors using the Calculate button, the new errors appear immediately for that field. If you calculate errors as a separate step, then you should save the errors prior to calculating weights.

Note. Since the error calculation may take much longer to execute, we suggest that you perform error calculation using Run Control.

Weight Calculations

To perform weight calculations, the system compares the error for the applicable user-adjusted forecast dataset and the error for the adjusted forecast dataset. The system uses a mean value of 100 to represent the weight for the adjusted forecast dataset. This adjusted forecast weight is never recalculated, and is only used if you want to use the adjusted forecast dataset value in conjunction with the user-adjusted forecast to arrive at a final adjustment value.

This example displays how the system provides an error value when you are updating user-defined forecasts. You can calculate the weight value by selecting the Calculate User Adjusted Forecast Weights check box.

Example of user-adjusted forecast error calculation

Using the example of the calculated error values from the previous page example, the system can calculate a weight value for each field. The adjusted forecast error is multiplied by 100 and then divided by the error of the user-adjusted forecast dataset, which yields the weight for that field. This table describes system calculations:

Field Name	Field Name	Error	Calculation	New Weight
Adjusted Forecast	DP_ADJFORECAST	0.054	N/A assumed to be 100	100
Collaboration	DP_FORECAST01	0.0693	0.054 * 100 / 0.0693 =	78
Budget	DP_FORECAST02	0.0943	0.054 * 100 / 0.0943 =	57
Sales and Marketing	DP_FORECAST03	0.1425	0.054 * 100 / 0.1425 =	38
Retail Customer	DP_FORECAST04	0.0411	0.054 * 100 / 0.0411 =	131
Wholesale Customer	DP_FORECAST05	0.0325	0.054 * 100 / 0.0325 =	166

The system updates the page with the new weights as shown in the next example. You can save the weights or make adjustments to them. If you run the calculations in batch mode, then the results are written directly to the applicable records.

Example of user-adjusted forecast weight calculations

Page Used to Establish User-Adjusted Forecast Details

Page Name	Object Name	Navigation	Usage
User Adjusted Forecast Details	DP_USERADJFCSTDETS	Demand Planning, Process Forecast, Calculations, Reconciliation Specification	Calculate errors and maintain weights for user-adjusted forecasts.

Calculating Errors and Weights for User-Adjusted Forecasts

Access the User Adjusted Forecast Details page.

This page does not display data until you select a collaborative display template and click Refresh to populate the Assigned Fields grid. You can calculate weights and errors immediately or use the Submit grid to define a run control ID and run the calculation in batch mode.

Collaborative Display Template	Select the display template to control which fields are available for adjusting by certain users. A display template is a grouping of forecast fields that the system uses to retrieve forecast item data for adjustments. You create and then reuse the template to retrieve forecast item data for adjustments. The templates determine what fields of data are available for adjustments. You assign the template to a specific forecast view when you create the template.
Calculate User Adjusted Forecast Errors	Select to indicate for the system to calculate error values for the fields that appear in the Assigned Fields grid. To calculate the errors, click the Calculate button. Note. Since the error calculation may take much longer to execute, we suggest that you perform error calculation using Run Control. Note. If you select the Calculate User Adjusted Forecast Errors and the Calculate User Adjusted Forecast Weights, the system calculates the errors first and then the weights.
Calculate User Adjusted Forecast Weights	Select to indicate for the system to calculate weight values for the fields that appear in the Assigned Fields grid. To calculate the weights, click the Calculate button. This calculation is relatively quick and does not have to be processed through Run Control.
Field Name	Displays a field and a description that have been included in the collaborative display template. Values appear when you click Refresh.
Weight	The weight determines the influence of this user-defined forecast field in relation to other fields when you are reconciling a forecast. You can override weight values or enter a zero value. Weight and error are retrieved from fields on the PS_DP_CONFIGLEVELS record for the selected view and level.
Error	Displays the MAPE value for this user-adjusted forecast in this view and level. MAPE values are the absolute values of all the percentage errors that are summed. The higher the value, the less accurate the forecast.
Calculate	Click to calculate the weight and error values for the fields that appear in the Assigned Fields grid. Note. Since the error calculation may take much longer to execute, we suggest that you perform error calculation using Run Control.

See Also

Understanding User-Adjusted Forecasts

Reconciling Forecasts Through Collaboration

This section provides an overview of forecast collaboration and discusses how to review collaboration forecast items.

Understanding Forecast Collaboration

You use forecast collaboration to select forecast items based on standard criteria. Collaboration enables you to enter selection criteria to identify items that may need to be reviewed and collaborated on to arrive at an agreed upon forecast. For example, you might want to review items with a specific customer where there are differences between the current adjusted forecast and the customer's forecast for one of the user-adjusted forecast. You can work with the customer to identify the differences using criteria, such as selecting forecasts with greater percentages of difference.

Pages Used to Reconcile Forecasts Through Collaboration

Page Name	Object Name	Navigation	Usage
Collaboration Item Review	DP_COLLAB_FCITEMS	Demand Planning, Review Forecast Information, Collaborate Forecast	Review collaboration forecast items.
Collaboration Item Details	DP_COLLAB_DETAILS	Demand Planning, Review Forecast Information, Collaborate Forecast Click the Details link on the Collaboration Item Review page.	Review collaboration forecast item details.

Page Name

Object Name

Navigation

Usage

Collaboration Item Review

DP_COLLAB_FCITEMS

Demand Planning, Review Forecast Information, Collaborate Forecast

Review collaboration forecast items.

Collaboration Item Details

DP_COLLAB_DETAILS

Demand Planning, Review Forecast Information, Collaborate Forecast

Click the Details link on the Collaboration Item Review page.

Review collaboration forecast item details.

Reviewing Collaboration Forecast Items

Access the Collaboration Item Review page.

This page provides information about forecast items that meet the search criteria you entered. The page also displays the adjusted forecast, the user-adjusted forecasts selected in the collaborative display template you defined on the search page, and the percentage difference for those fields. This enables you to manage items by exception.

Forecast Item	Click the link to access the Adjustment Workbench where you can make adjustments to an item.
Detail	Click the link to access the Collaboration Item Details page where you can review the percentage difference for each period and year.
Review Done	Click to indicate that the collaboration review is complete for this forecast item and that you want it removed from exception consideration. After you select the check box, click the Save Reviews button to update the status of the error and remove it from the page. Also, when the field is selected, the system prevents any batch processing that may be run later from applying adjustments to the item. Note. To apply adjustments to applicable items after running a batch process, the system resets the Review Done check box (DP_COLLABREVDON record) to clear.
% Difference(percentage difference)	Displays the absolute difference between the adjusted forecast and the user-adjusted forecast. The system calculates the value using this formula: (adjusted forecast – user-adjusted forecast)/adjusted forecast * 100 If multiple datasets were selected in the collaborative display template, then the system provides a percentage difference for each one.

See Also

Understanding Forecast Collaboration

Reviewing Collaboration Forecast Item Details

Access the Collaboration Item Details page: Detail 1 tab.

This is a display-only page that provides basic information about an item's forecast. It displays the adjusted forecast and collaborated forecast for an item along with the percentage of difference between the two forecasts. The remaining tabs on the page provide access to additional user forecasts and their percentage differences with the adjusted forecast.

See Also

Reviewing Forecast Items

Defining Forecast Reconciliation Specifications

Reconciliation specifications make it possible for you to select similar options for running against a selected group of forecast items. This section discusses how to:

Define reconciliation specifications.
Run forecast reconciliation.

Page Used to Set Up Reconciliation Specifications

Page Name	Object Name	Navigation	Usage
Reconciliation Specification	DP_VWRECONSPEC	Demand Planning, Process Forecast, Calculations, Reconciliation Specification	Define reconciliation specifications for reuse when reconciling forecasts.
Forecast Reconciliation	DP_VWRECONCILE	Demand Planning, Process Forecast, Calculations, Forecast Reconciliation	Run forecast reconciliation.

Defining Reconciliation Specifications

Access the Reconciliation Specification page.

To create the specification you must enter a name for the specification along with a forecast view and level to which the system calculates and applies adjustments. The specification provides a filtering mechanism so that the selection criteria can be entered and previewed to determine the forecast items that might be affected by the process.

Collaborative Template	Select a collaborative display template from which to apply user-adjusted forecast fields. A collaborative template is a type of adjustment display template that can also be used for reconciling forecasts. You define the template using the Adjustment Display Template feature.
Refresh	After you select a collaborative template, click Refresh to populate the Assigned Fields grid with the fields from the template. The fields include those forecasts (adjusted and user-adjusted) fields from the template that are not defined as display only.
Adjustment Action	Select either Replace or Add to indicate how the system should process the adjustment for the fields you selected. You use Replace to merge one or more user-adjusted forecasts into a blended number to replace the current adjusted forecast. Use Add to add an user-adjusted forecast, which can include promotions, only onto the current adjusted forecast.
Forecast Process Action	Determines the nature of the adjustment and how the adjustment to the forecast is treated by the Proration process. The codes also determine what order the adjustments are processed in when you simulate, calculate, adjust, prorate, and summarize forecast. You can select any value.
Process Action Comment, Reason Code, and Reason Comment	Optional fields for defining the reconciliation specification. See Adjusting Forecasts and Demand.
Span From Period, From Year, and Number of Periods	These fields are required for defining the reconciliation specification. See Adjusting Forecasts and Demand.
Field Name	Displays fields that were assigned to this collaborative display template. You use the Adjustment Display Template page to assign the fields. To access the page, select Demand Planning, Define Security, Adjustment Display Template.
Weights	Enter the weight value you want for a user-defined forecast field or use the current value that may have been calculated or maintained previously. The weight determines the influence of this user-defined forecast field in relation to other fields when you are reconciling a forecast. See Understanding User-Adjusted Forecasts.
Exclude when Adjustment in Period changes by less than	Enter a percentage that determines if the calculated result for the forecast item in that period needs to be applied.
Exclude when Adjustment in Period changes by more than	Enter a percentage to exclude items where the difference is more than the absolute percentage. For example, you might want to select forecast items for a specific level, customer ID, and location for a particular time period where the weighted forecast adjustment would be different from the adjusted forecast by more than 15 percent, but exclude those forecast items where the percentage is greater than 200 percent. The system also generates a Work Queue alert if the value is excluded, provided that it is set to record the error on the control group. To define the alert for the control group, select Demand Planning, Define Forecast Elements, Control Groups, Define, Work Queue.
Report Work Queue Alert when Adjustment in Period changes by more than	Enter a value that determines if the system generates a Work Queue alert provided it is set to record the error on the control group. This can alert you to a high percentage of adjustments that were not allowed to be made but not excluded.
Exclude Zero Forecast Values from Adjustment Calculation	Select to indicate that user-adjusted forecast values that are zeros do not cause a detrimental effect to the end calculation. For example, if the weight value is zero, then the calculation is okay, but if the weight is not zero and the user-adjusted forecast is zero, then the forecast adjustment can be dramatically lower.

Running Forecast Reconciliation

Access the Forecast Reconciliation page

You use the Forecast Reconciliation process to reconcile forecast views.

Forecast View	Select the view for which you want to process user-adjusted forecast.
Reconciliation Specification	Select a predefined specification containing the forecast fields you want to process.
Level	Displays the view level to which the reconciliation specification applies. The value appears when you select a specification.
Rollup Forecast Adjustments	Select if you want the system to automatically update forecast adjustments that are made at lower levels in the view to parent forecast items at higher levels. The system determines the default setting by the value defined on the User Preferences page for this user ID and view.
Comment Handling	Select a value that controls how the comments that you enter for an adjustment are applied to single or multiple periods. These are processed in relation to existing comments from previous adjustments.
Edit Reconciliation Specification	Select to access the Reconciliation Specification page where you can update specification details for the specification you are using.

See Also

Adjusting Forecasts and Demand

Using the Reconciliation Workbench

This section discusses how to:

Update forecasts items using the Reconciliation Workbench.
Define preferences for the Reconciliation Workbench.

Pages Used to Use the Reconciliation Workbench

Page Name	Object Name	Navigation	Usage
Reconciliation	DP_VWRECON_WORK	Demand Planning, Process Forecast, Forecast Items, Reconciliation Workbench	Update forecast items using the Reconciliation Workbench.
Preferences	DP_VWRECON_PREFS	Demand Planning, Process Forecast, Forecast Items, Reconciliation Workbench	Define preferences for the Reconciliation Workbench.

Updating Forecast Items Using the Reconciliation Workbench

Access the Reconciliation page.

The Reconciliation Workbench uses the existing collaborative display template functionality so that you can select which user-adjusted forecast datasets display on the workbench for collaboration purposes. You add default settings for the template and historical and future collaboration periods using the User Preferences page.

The Reconciliation Workbench has some similarities to the Adjustment Workbench. The most significant difference is how the system applies adjustments. You can enter a value in the Adjustment column on the Adjustment Workbench; whereas in the Reconciliation Workbench, the system calculates a weighted adjustment for the Reconcile column.

See Adjusting Forecasts and Demand.

You use the Span From Period, Year, and Number of Periods fields to indicate which periods the system updates for Reconciliation Workbench. If you do not use the fields, the system provides a Reconcile column so you can select records row-by-row for update.

Adjustment Action

Select an action. The Replace action factors user-adjusted forecasts together to arrive at a final adjustment and the Add action aggregates user-adjusted forecasts to arrive at a final adjustment. This makes it possible for you to use forecast inputs from various sources and weight them accordingly, arriving at a final adjustment for collaborative purposes. It also makes it possible for you to accumulate forecast inputs from various sources weight them to arrive at a final adjustment for the forecast. While the same weight would normally be used for each one, it is not required.

If you use the Replace action, the system uses the fields that contain an integer other than blank or zero in the Weights field. If the adjusted forecast contains a weight value, then the system factors the current value into the calculation.

Weights

Enter a weight factor or use the current value in any of the selected fields, including the Adjusted Forecast field. If you do not enter a weight for a row, the system processes it as a zero. Weights provide relative weighting and are aggregated to derive a weight total.

The system uses calculations to factor the selected user-adjusted forecasts against the adjusted forecast to determine the exact forecast adjustment that it applies. If the adjustment action is Replace, the system uses this calculation formula:

(DP_ADJFORECAST * WeightFactorX0 / WeightTotal) + (UAF01 * Weight FactorX1 / WeightTotal) +

If the adjustment action is Add, the system uses this calculation formula:

(DP_ADJFORECAST * WeightFactorX0 / WeightAverage) + (UAF01 * WeightFactorX1 / WeightAverage) +

Note. Only those user-adjusted forecasts that display on the Reconciliation Workbench are included in the calculations.

See Also

Adjusting Forecasts and Demand

Defining Preferences for the Reconciliation Workbench

Access the Preferences page.

Use this page to set up preferences for use during processing. Preferences are default values that you set up for individual users and that the system uses automatically. These values determine a variety of settings and certain updates that the system makes when that specific user requests forecast data from workbenches and inquiries.

See Also

Setting Up Adjustment Preferences