New Location Setup

Use this workspace to assign like stores to handle forecasting for New Stores. The like store assignment is manual and there is a good reason for it. New stores have a large financial impact, so it makes sense having a business person making the like store selection.

It is probably more appropriate than going with an automatic selection based on something such as store attributes. Also, new store introductions are infrequent compared to New Item introductions, so manually handling New Stores is not a significant overhead activity.

Figure 11-43 New Location Setup

This image shows the new item and location setup.

The metrics available in this workspace are:

  • Like Store: In this measure, you can specify the like store. Note how the like store can be different by product. A different like store selection can be made for any merchandise level as defined in the top filters.

  • Adjustment Factor: This measure is relevant to the Like Store Substitution method. It determines how much of the base rate of demand of a like store is applied to the new store. For instance, if the adjustment factor is 1.25, the base rate of demand of the new store is 1.25 times the base rate of demand of the like store.

  • Substitute Method: This measure displays a list where you can select the substitute method.

    When a substitute method is used to forecast, the method set for an intersection is cleared once the Default Forecast Start Date is greater than the Forecast Start Date Override plus the TS Duration for the intersection. Valid substitute method options are:

    • blank: No forecast is created for the time series.

    • Like Store: If you select Like Store as strategy to generate forecast for the new store, the base demand of the new store is the base demand of the like store times the Adjustment Factor.

    Base demand new store = base demand like store * Adjustment Factor

    The forecast for the new store is calculated as:

    Forecast at time t = base demand new store * seasonality at time t (coming from escalation level) * promo and price effects

    Once the setup is finished, click the Approve button, and the Approval Date will update.

  • Approve Date: date when the forecast strategy for the new location was set up and approved.