Method 9

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. Weighted Moving Average

Specify which type of forecast to use. The Weighted Moving Average forecast formula is similar to Method 4: Moving Average formula, because it averages the previous number of months of sales history indicated in the processing options to project the next month's sales history. However, with this formula you use the processing options to assign weights for each of the prior periods (up to 12).

This method uses the number of weighted periods selected plus period's best fit. Similar to the Moving Average, this method lags demand trends, so this method is not recommended for products with strong trends or seasonality. This method is useful for mature products with demand that is relatively level. Values are:

Blank: Does not use this method.

1: Uses the Weighted Moving Average formula to create summary forecasts.

2. One Period Prior through 13. Twelve Periods Prior

Specify the weight to assign to one period prior through 12 periods prior for calculating a moving average. The total of all the weights used in the Weighted Moving Average calculation must equal 100. If you do not enter a weight for a period within the specified number of periods, the system uses a weight of zero for that period. The system does not use weights entered for periods greater than the number of specified periods. Enter the number to use or select it from the Calculator.

14. Periods to Include

Specify the number of periods to include in the Weighted Moving Average forecast method. Enter the number to use or select it from the Calculator.