Chapter 25: Introducing Forecasting

Purpose: Forecasting allows you to project:

• Mail and telephone response by week or by day

• Future activity of an offer

• Item requirements

How forecasting works: You set a pre-defined curve that the order activity is expected to follow. The system uses the curve you define and the actual order activity to project activity for the rest of the offer.

Most of the parameters in the Forecasting system are user-defined and are set up in the System Control file. See Setting Up Forecasting Values.

How forecast data is calculated: When an order is placed, the system determines how many days from the date of the first order for the offer and source code that the transaction occurred. A transaction can be an order, a return, an exchange, a sale, or a sell-out. If there is no date of first order, then the order date is used.

Once the system calculates how many days have elapsed since the date of the of the first order, it divides this number by the number of days in a forecasting period, defined in the System Control file, to determine the appropriate forecasting period to use. If the calculated value exceeds the number of forecasting periods defined in the System Control file, then the last period (or the period that is equal to the number of forecasting periods) is used.

File setup: The files and fields that you need to set up before you can use the Forecast system are:

• Source Category

• Projection Curve

• Offer number and its associated Curve

• Source code and its associated:

• Category

• Type

• B/E amount (Break even amount)

• Cover code

• Drop code

• House acct code (House account code)

Data collection: The following table illustrates the information the system captures for each item/SKU/offer, source, and offer/drop and the information captured during each forecasting period and on a daily basis.

Item/SKU/Offer	Source	Offer/Drop	Each Forecasting Period	Daily
Item	Source	Offer	Offer	Offer
SKU	Forecast period #	Drop	Drop	Drop
Offer	Start date	Date of first order	Forecasting period #	Forecast period #
Forecast period #	End date	Date of first order for order category #1	Start date	Date
Start date	Number of orders	Date of first order for order category #2	End date	Number of orders for order category #1
End date	Dollar value of orders		Number of orders for order category #1	Dollars ordered for order category #1
Quantity ordered			Dollars ordered for order category #1	Number of orders for order category #2
Dollars ordered			Number of orders for order category #2	Dollars ordered for order category #2
Quantity returned			Dollars ordered for order category #2
Dollars returned
Quantity canceled
Dollars canceled
Quantity shipped
Dollars shipped
Quantity sold out
Dollars sold out
Quantity exchanged
Dollars exchanged

Producing a forecast: See Working with Forecasts (WFCS) for information on creating and specifying amounts for a forecast.

Forecasting reports: See Forecasting Reports for information on the various reports, including the Inventory Status & Projection Report (ISRP), which you can use to review forecast information.

Inventory status inquiry: You can use the Inventory Status Inquiry (ISIQ) menu option to review order activity for an item or SKU. You can also use the Inventory Status/Projection Inquiry (ISPI) menu option to review the information and projections generated when you ran the Inventory Status & Projection Report (ISRP).