Forecast Consumption
Forecast consumption is the process that replaces forecast demand with sales order demand. Each time you place a sales order, you create actual demand. If you have actual demand, you want to reduce the forecast demand by the sales order quantity to avoid overstating demand. The forecast consumption process deducts sales orders (actual demand) from the gross forecast, after spreading and rounding, to come up with a net forecast. Configure the forecast consumption parameters on the Plan Options page, Supply tab, Forecast Allocation and Consumption subtab.
Use the Consumption Calendar and Consumption Bucket Type options to specify the calendar and bucket type to use for forecast consumption. Depending on the type of calendar that you select, such as a 4-4-5 or Gregorian calendar, you can then specify the time bucket to use for forecast consumption.
If you select the Consume by forecast bucket check box, then consumption happens within a single forecast bucket. For example, if the Forecast Time Level is set to week, then sales orders are deducted from the gross forecast of that same week.
If you don’t select the Consume by forecast bucket check box and specify values for the options Backward Consumption Buckets and Forward Consumption Buckets, forecast consumption is affected. These choices create a forecast consumption window of time consisting of the backward and forward consumption buckets. When consuming the forecast, these choices determine whether planning nets sales orders from the prior or subsequent time buckets.
For example, you specify 5 backward and 5 forward days and the forecast consumption is in daily buckets. The consumption search first moves 5 working days backward from the forecast date, deducting open sales order quantities from the forecast quantity until the forecast quantity is depleted. If there is any remaining forecast quantity, then consumption moves 5 working days forward from the forecast bucket, deducting open sales order quantities from the forecast quantity.
You can specify additional forecast consumption parameters for a plan by defining the following options:
- Consume Forecast Inside Demand Time Fence
- Time Frame for Consuming Forecasts with No Demand Class
- Prefer Consumption Within Forecast Bucket
- Consumption Detail Cutoff Days
Consume Forecast Inside Demand Time Fence
If you enable this option, forecast consumption occurs before enforcing the demand time fence control. The forecast entries within the demand time fence are used for consumption but not as a demand. After consumption, any forecast entries within the demand time fence are removed.
If you disable this option, the demand time fence control is implemented before the forecast consumption. Forecast entries in the demand time fence are dropped as demand statements and are not used for consumption.
Time Frame for Consuming Forecasts with No Demand Class
Use this option to instruct the forecast consumption process about the order to use to consume forecast entries when some of the forecasts have a demand class and others don’t have a demand class.
If you select Within each bucket from the drop-down list, the forecast consumption process starts by consuming forecast entries within the consumption bucket of the sales order. At first, it consumes entries with matching demand class and then entries with no demand class. Then it consumes forecast entries within the backward and forward consumption buckets. For each bucket, it uses the matching demand class first and then the no demand class.
If you select After consuming forecasts specific to the demand class from the drop-down list, the forecast consumption process starts by consuming forecast entries within the consumption bucket of the sales orders with matching demand class only. Then it consumes forecast entries within the backward and forward consumption buckets with matching demand class only. If there are any remaining sales order quantity, it repeats the process for forecast entries with no demand class. At first the process runs within the consumption bucket of the sales order and then within the backward and forward consumption buckets.
Prefer Consumption Within Forecast Bucket
Select to specify whether to spread forecasts evenly and then consume if a sales order falls in the same time bucket as the forecast using Backward Consumption Buckets first followed by Forward Consumption Buckets.
If you enable the option, the planning process consumes the forecast within the forecast bucket. This option takes effect when you select Spread forecast evenly for forecast spreading and deselect the Consume by forecast bucket check box.
Consumption Detail Cutoff Days
Enter a value for the planning process to use to write forecast consumption detail records for a supply plan. The value that you enter is the number of days forward from the plan start date that the planning process writes the consumption details for sales orders or transfer order demands.
View the sales orders or transfer order demands that consumed a particular forecast in the Forecast Consumption table, which you access from the Supplies and Demands or Material Plan table.
Here’s some additional information about the Consumption Detail Cutoff Days parameter:
- The number entered must be greater than or equal to zero. If the value is null or zero, then the planning process won’t calculate any consumption details.
- The number must be less than or equal to the plan horizon in days.
- The number entered is added to the plan start date to get a cutoff date and identify
the eligible sales orders. The planning process writes the corresponding forecast
consumption details in the Forecast Consumption table.
The cutoff date is calculated based on the supply planning calendar associated with the plan. The planning process writes the forecast consumption details for any sales order or transfer order demand with a due date less than or equal to the cutoff date.
Note: If the forecast consumption starts before the plan start date based on past due sales orders and forecasts that are snapshot into the plan, the planning process clears the forecast consumption details, beginning with the first consumption bucket.