Statistical Forecasts, Causal Factors, and Decomposition Groups

Demand Management generates the statistical forecast based on the historical shipments, bookings, or both.

You understand the variations in the demand using causal factors. On running a demand plan, the forecast is generated based on the forecasting profiles you applied in the plan. The forecast is automatically generated at individual combinations of Item and Organization. The analysis and analytical choices that you make can vary from one combination to another. You can create a statistical demand forecasting profile or copy one of the predefined forecasting profiles using the Manage Forecasting Profiles tasks under the Demand Management work area.

Causal Factors and Decomposition Groups

You use causal factors to understand the variation in historical demand and produce an accurate and adaptive forecast. Causal factors are the demand drivers that explain the variation in demand. They can provide additional insights on how individual external factors impact and contribute to the forecast.

Decomposition groups are collections of causal factors that provide the ability to break down the total forecast into the distinct groupings of causal factors. Each decomposition group includes one or more measures. The measures are used by the demand forecasting process as causal factors. The results of the forecast are split into different decomposition groups. You can view how individual decomposition groups are analyzed in the history and understand their impacts on the forecast.

You have predefined decomposition groups that are part of your forecasting profile. You can edit your forecasting profile and configure for your business needs.

You also have the ability to modify the causal factors that are used in the forecasting profile. This provides a high degree of control in how the demand forecast analyzes historical demand, by incorporating a variety of inputs, which are relevant to your business.