Forecast
You can use the forecast in SAP F&R to determine future consumption for a location product. This means you can ensure product availability while at the same time keeping stock levels low. The forecast is a key process in SAP F&R.
Process
In the forecast, SAP F&R determines the future demand for a location product using historical data. Based on the assigned forecast technique, the forecast determines future consumptions using the sales history. Influencing factors here are, for example, product lifecycles of trend and seasonal products. The selling classes that are determined in the forecast enable you to use selling-class-specific parameters. Products are allocated to selling classes according to the classification mean value.
Forecast
The forecast is based on the demand history that you import into SAP F&R using the interface. You can have the data from the sales history undergo data cleansing. You can adjust high values (consumption peaks) and low values (consumption troughs) and analyze zero values. If they are attributed to stockouts, SAP F&R replaces the null values by mean values (depending on your settings in the forecast profile).
You can also take account of demand influencing factors (DIFs) in the forecast.
By examining historical occurrences of DIFs and their effect on historical demand, the system derives the potential effects on consumer behavior in the future. It is important that the DIFs contribute significantly to the quality of the forecast and that they can be defined for past and for future events. You can also import DIFs from an external system (for example, a promotion planning system) or you can create and process them manually.
You can manually enter planning data and thus override the regular forecast values in the requirements calculation.
The forecast is performed according to the settings in the frequency profile.
Result
The result of the forecast is:
The mean forecast contains the future consumption in which all expected uplifts and downlifts are taken into consideration.
The maximum forecast contains the mean forecast and, in addition, the safety stock. By defining a certain service level, SAP F&R calculates a dynamic safety stock during the forecast, which depends on the expected forecast errors and the replenishment lead time.
You can save the forecast including a safety amount as a time series. The expected forecast error can also be saved as a time series.