Example 1 for the Preparation Service for the LI-Based Forecast 

●      You have assigned the following BOD to product X:

The entry location Chicago has the following child locations:

○       Stockholding location New York

○       Stockholding location Antwerp

○       Stockholding location Rome

○       Stockholding virtual child location (vCL) Chicago

The Antwerp location has the non-stockholding location Berlin as a direct child location.

●      In the entry location Chicago you have assigned a leading indicator group, which contains the leading indicators Installed Base and Number of Uses.

●      You have assigned the Installed Base leading indicator to product X.

●      Product X is not part of a supersession.

●      In period 06.2005, the entry location Chicago had an aggregated demand of 9 items of product X.

●      In the service profile for the distribution service for the leading-indicator-based forecast you have set the Read BOM of LI flag.

●      In period 06.2005 you have the following equipment on the market:

○       Equipment A

The demand for equipment A occurred in the New York location. This equipment has been assigned an equipment BOM with the following items:

■       4 of product X

■       4 of  product Y

■       1 of product Z

○       Equipment B

The demand for equipment B occurred in the Berlin location. This equipment corresponds to product X.

○       Equipment C

The demand for equipment C occurred in the Rome location. This equipment has been assigned an equipment BOM with the following items:

■       10 of product X

■       8 of product Y

○       Equipment D

The demand for equipment D occurred in the virtual child location Chicago. This equipment has been assigned an equipment BOM with the following items:

■       7 of product X

■       4 of product Z

●      You have not defined any selection criteria for your equipment.

Demand History for Leading Indicator Installed Base for Product X

For product X, the preparation service proceeds to determine the demand history of the assigned leading indicator Installed Base as follows:

...

       1.      The preparation service reads the available equipment BOMs and counts how often product X occurs in each of these:

○       Equipment A: 4 times

○       Equipment C: 10 times

○       Equipment D: 7 times

The preparation service checks whether there is equipment corresponding to product X and determines equipment B.

○       Equipment B: 1 time

       2.      The preparation service determines the first stockholding locations for product X and the history of the leading indicator for the resulting location products as follows:

○       The demand for equipment A occurred in the New York location. This location is stockholding. Hence, a location product of product X is location product NewYork_X. The demand history of the leading indicator Installed Base for location product NewYork_X is 4.

○       The demand for equipment B occurred in the Berlin location. This location is not stockholding. The direct parent location of the Berlin location is the Antwerp location. This location is stockholding. Hence, a location product of product X is location product Antwerp_X. The demand history of the leading indicator Installed Base for location product Antwerp_X is 1.

○       The demand for equipment C occurred in the Rome location. This location is stockholding. Hence, a location product of product X is location product Rome_X. The demand history of the leading indicator Installed Base for location product Rome_X is 10.

○       The demand for equipment D occurred in the virtual childlocation Chicago. This virtual child location is stockholding. Hence, a location product of product X is location product vCLChicago_X. The demand history of the leading indicator Installed Base for location product vCLChicago_X is 7.

       3.      The preparation service aggregates the values of the demand history for the leading indicator Installed Base along the BOD for product X as follows and thus gets the demand history for the leading indicator Installed Base at entry location level:

LI value NewYork_X + LI value Antwerp_X + LI value Rome_X + LI value vCLChicago_X =  4 + 1 + 10 + 7 = 22

       4.      The preparation service determines the historical value of the coefficient for period 06.2005 as follows:

Final demand for spare part X in per. 06.2005 / value of dem. hist. of LI in per. 06.2005 = 9 / 22 = 0.409