Forecast an Assemble-to-Order Item

Set up a forecast according to your organization for an assemble-to-order item.

Use the Planning Central work area to set up the forecast.
Create a statistical forecast for an assemble-to-order item. Use shipment history and booking history to do the forecast.
Consume the forecast for your model. Each sales order that contains your configured item consumes the forecast.
Explode the forecast that remains after the model is done consuming. Generate a production forecast for your option classes and options.

Planning Central displays the forecast for the options, option classes, and child models as a production forecast. It indicates the forecast that remains after planning consumes the forecast for the model that your sales orders needs to fulfill the configured item.

Planning uses the planning percent you set on the class and option to forecast demand. You specify the percent when you set up the structure for the item in the Product Information Management work area.
Create supply for your forecast according to organization. Set up a planning sourcing rule that sources components and subassemblies.
Planning uses the fixed and variable lead times you set up on the model to offset the production forecast it creates for the options.

Here's an example.

example of Forecast an Assemble-to-Order Item

Assume you need organization M1 to manufacture an assemble-to-order model that includes a hierarchy.

Laptop Computer Model
- Camera Option Class
  - Dual Camera Option
  - Single Camera Option
- Speaker Option Class
  - Built-in Option
  - External Option

Assume your market research indicates you expect.

100% demand for the camera. Everybody wants one.
60% demand for a dual camera and 40% for a single camera.
80% demand for high-fidelity speakers.
Of the 80% who want high-fidelity, 70% want built-in speakers, and 30% want external speakers.

Assume you set up the model.

Object	Forecast Control	Planning Percent
Laptop Computer Model	Consume Then Explode	Not applicable.
Camera Option Class	Consume Then Explode	100
Dual Camera Option	Consume Then Explode	60
Single Camera Option	Consume Then Explode	40
Speaker Option Class	Consume Then Explode	80
Built-in Option	Consume Then Explode	70
External Option	None	30

The configured item in the sales order consumes part of the forecast. Planning explodes what's left over according to your set up. Assume 1,000 units are available to explode after the sales order consumes the configured item.

Here's the math.

Object	Math
Camera Class	The model consumes one unit of the camera class for each laptop. You expect 100% of your customers will want a camera. So planning calculates the production forecast at 1,000. `100% multiplied by 1,000 units that are available to explode equals 1,000.` `1,000 multiplied by a quantity of one equals 1,000.`
Dual Camera Option	The dual camera option needs two cameras for each laptop, so the model consumes two units. You expect 60% of your customers will choose this option. Planning calculates the forecast at 1,200. `60% multiplied by 1,000 units in the camera class equals 600.` `600 multiplied by a quantity of two equals 1,200.`
Single Camera Option	The single camera option needs only one camera for each laptop, so the model consumes one unit. You expect 40% of your customers will choose this option. Planning calculates the forecast at 400. `40% multiplied by 1,000 units in the camera class equals 400.` `400 multiplied by a quantity of one equals 400.`
Speaker Class	The model consumes one unit of the speaker class for each laptop. Assume the speaker class allows your user to choose high-fidelity speakers, either built-in or external. You expect 80% of your customers will want high-fidelity speakers. Planning calculates the forecast at 800. `80% multiplied by 1,000 units that are available to explode equals 800.` `800 multiplied by a quantity of one equals 800.`
Built-in Option	You need only one set of built-in speakers for each laptop, so the model consumes 1 unit of the built-in option. You expect 70% of your customers will choose this option. Planning calculates the forecast at 560. `70% multiplied by 800 units in the built-in class equals 560.` `560 multiplied by a quantity of one equals 560.`
External Option	You need only one set of external speakers for each laptop, so the model consumes 1 unit of the external option. You expect 30% of your customers will choose this option, but you set the Production Forecast to None for this option. So planning doesn't calculate a forecast.

Assume you set the fixed lead time for the model to 5 days and the variable lead time to 0. Here's how planning explodes the forecast that's due on day 15.

Object	Production Forecast Date	Quantity, in Units
Model	Day 15	1000, after consuming forecast for the model
Camera Class	Day 10	1000
Dual Camera	Day 10	1200
Single Camera	Day 10	400

For details, see Forecasting for CTO Products.