Method 12

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

Enter 1 to use the forecast method when calculating the best fit. If you leave the processing option blank, the system does not use that forecast method when calculating the best fit and does not create summary forecasts for the method.

The system defines a period as a week or month, depending on the pattern that is chosen from the Date Fiscal Patterns table (F0008). For weekly forecasts, verify that you have established 52 period dates.

1. Exponential Smoothing with Trend and Seasonality

Specify which type of forecast to run. This forecast method calculates a trend, a seasonal index, and an exponentially smoothed average from the sales order history. The system then applies a projection of the trend to the forecast and adjusts for the seasonal index.

This method requires month's best fit plus two years of sales data and is useful for items that have both trend and seasonality in the forecast. Use the Alpha Factor and Beta Factor processing options to enter the alpha and beta factors rather than have the system calculate them. Values are:

Blank: Does not use this method.

1: Uses the Exponential Smoothing with Trend and Seasonality formula to create summary forecasts.

2. Alpha Factor

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

3. Beta Factor

Specify the beta factor (a smoothing constant) that the system uses to calculate the smoothed average for the trend component of the forecast. You can enter any amount, including decimals, from zero to one.

4. Seasonality

Specify whether the system includes seasonality in the calculation. Values are:

Blank: Does not include seasonality.

1: Includes seasonality in the Exponential Smoothing with Trend and Seasonality forecast method.