Configure Forecast Models
Forecast models are used to calculate forecast quantities for future periods based on historical actual sales. You can define an unlimited number of forecast models. The Supply Plan Daily Calculations Routine will select an active forecast model with the least amount of errors as the best-fit forecast model for each of the SKUs. The Calculate Forecast routine will use the best fit forecast model to calculate forecasts.
Periodically, forecast models with large forecasting errors should be inactivated or deleted. Forecast models with small forecasting errors should be cloned and tweaked then added to the active Forecast Models. Since GoldFinch only selects the best-fit formula with the least amount of errors, it’s best to try out several different forecast models.
Forecast Model
Field Label | Field Level Help |
Active | Only Active Forecast Models will be used. |
Calculate First Period Forecast Only | If checked, the forecast quantity for the first future period will be calculated using the best fit forecast model. The forecast quantity for other future periods will be copied from the first period. If not checked, the forecast quantity for all future periods will be calculated using the best fit forecast model. |
Forecast Model Line
Field Label | Field Level Help |
Adjustment % | Actual sales quantity can be adjusted for the forecast calculation. |
Forecast Model | Linked to the Forecast Model. |
Include In Trend | If checked, this period's actual sales quantity will be included to calculate the growth trend %. |
Period | Look-back period number. Ex. enter 1 to look back one period before the current period. Enter 2 to look back two periods before the current period, etc. |
Seasonal Trend | Blank, Current Season, or Prior Season. Periods assigned with Current Season or Prior Season are used to calculate the seasonal grown %. |
Weight | The weight assigned to the period to calculate the weighted average. |
Sample Forecast Models
3 Months Moving Average
Period | Adjust % | Weight | Included in Trend | Seasonal Trend |
|---|---|---|---|---|
1 | 3 | No | ||
2 | 2 | No | ||
3 | 1 | No |
6 Months Moving Average with Trend
Period | Adjust % | Weight | Included in Trend | Seasonal Trend |
|---|---|---|---|---|
1 | 3 | Yes | ||
2 | 2.5 | Yes | ||
3 | 2 | Yes | ||
4 | 1.5 | Yes | ||
5 | 1 | Yes | ||
6 | 0.5 | Yes |
Simple 5% Growth Based on Last Year
Period | Adjust % | Weight | Included in Trend | Seasonal Trend |
|---|---|---|---|---|
13 | 5% |
3 Months Moving Average with Seasonal Trend
Period | Adjust % | Weight | Included in Trend | Seasonal Trend |
|---|---|---|---|---|
1 | 1 | Yes | Current Season | |
2 | 1 | Yes | Current Season | |
3 | 1 | Yes | Current Season | |
13 | Prior Season | |||
14 | Prior Season | |||
15 | Prior Season |
Illustration with Sample Calculations
To illustrate calculations, let's create a forecast model.
3 Months Moving Average with an Adjustment % of 5% with Trend and Season Analysis.
Sample Forecast Model
Period | Adjust % | Weight | Included in Trend | Seasonal Trend |
|---|---|---|---|---|
1 | 5% | 3 | yes | Current Season |
2 | 5% | 2 | yes | Current Season |
3 | 5% | 1 | yes | Current Season |
13 | Prior Season | |||
14 | Prior Season | |||
15 | Prior Season |
Let’s assume today's date is 3/25/20. How will the forecast quantity be calculated for this month?
Inventory Period Type = By Month on the Demand Planning Setup
The Current Period Date is the first date of the current inventory period, 3/1/20.
These are the actual entries for the prior periods.
Sample Forecast Model:
Period | Period Starting Date | Actual |
|---|---|---|
1 | 2/1/20 | 10 |
2 | 1/1/20 | 20 |
3 | 12/1/20 | 30 |
13 | 2/1/19 | 10 |
14 | 1/1/19 | 11 |
15 | 12/1/18 | 12 |
Forecast Model Calculation Template 032520.xlsx
Steps to Calculate the Quantity
Step 1: Calculated Adjusted Qty. for each of the periods
Step 2: Calculated Weighted Average
(31.5+42+31.5)/(3+2+1) = 17.5
Step 3: Calculated Average Trend. The maximum growth trend is 200% per period
(-0.5+0.33)/2 = 17%
Step 4: Calculate Forecast Qty. with Trend %
17.5 x (1+17%) = 14.58
Step 5: Calculate Seasonal Trend
Current Season Total = 10+20+30 = 60
Prior Season Total = 10+11+12 = 33
Seasonal Growth % = (60 - 33) / 33 = 82%
Step 6. Calculate Forecast Qty. with Season Trend is %
14.58 * (1+82%) = 31.82