Method 10-11

These processing options let you specify which forecast types that the system uses when calculating the best fit. You can also specify whether the system creates detail forecasts for the selected forecast method.

1. Linear Smoothing

Specify which type of forecast to run. This forecast method calculates a weighted average of past sales data. You can specify the number of periods of sales order history to use in the calculation (from 1 to 12) in a processing option. The system uses a mathematical progression to weigh data in the range from the first (least weight) to the final (most weight). Then, the system projects this information for each period in the forecast. This method requires the periods best fit plus the number of periods of sales order history from the processing option. Values are:

Blank: Does not use this method.

1: Calculates the best fit forecast.

10: Uses the Linear Smoothing method to create detail forecasts.

2. Number of Periods

Specify the number of periods to include in the smoothing average. Enter the number to use or select a number from the Calculator.

3. Exponential Smoothing

Specify which type of forecast to run. This forecast method uses one equation to calculate a smoothed average. This becomes an estimate representing the general level of sales over the selected historical range. This method is useful when there is no linear trend in the data. This method requires sales data history for the time period represented by the number of periods best fit plus the number of historical data periods specified in the processing options. The minimum requirement is two historical data periods. Values are:

Blank: Does not use this method.

1: Calculates the best fit forecast.

11: Uses the Exponential Smoothing method to create detail forecasts.

4. Number of Periods

Specify the number of periods to include in the smoothing average. Enter the number to use or select a number from the Calculator.

5. Alpha Factor

Specify the alpha factor, a smoothing constant, the system uses to calculate the smoothed average for the general level or magnitude of sales. You can enter any amount, including decimals, from zero to one.