Supply Chain Forecasting: Forecast modeling

forecast modelingThere are basically two ways to generate a supply chain forecast. One is to manually create a supply chain forecast using historical information, previous forecasts, last year’s actual supply chain demand, and input from your marketing and sales team to determine what demand you expect in the future. This is by far the most popular method for creating a forecast – especially in industries where past demand is not indicative of future demand and in make to order environments (such as job shops) where it is difficult, if not impossible to predict what products will be sold.

Anytime Supply Chain software is a fantastic tool for companies that simply need a way to integrate their Excel forecasts with their ERP and DRP/MRP planning software.

The other way that forecasts are created is by using a statistical engine to evaluate demand history to predict future supply chain demand based on patterns in the data. Systems like Forecast Pro by Business Forecast Systems do a fantastic job of identifying seasonal patterns, declining product lines, and product lines that are ramping up in demand. They analyze historical demand and apply different statistical models such as exponential smoothing, Croston’s intermittent method, Box-Jenkins, etc.

Forecast modeling applications are very useful and extremely accurate in many environments – especially in consumer goods where historical demand is a good indicator of future demand. However, forecast modeling isn’t for everyone.

Companies using Anytime Supply Chain software can export demand history from their ERP software, run it through a forecast modeling application, and then import the results into Anytime Supply Chain software to use for DRP and MRP planning.

forecast modeling
Anytime Supply Chain can be used with statistical forecast modeling products like ForecastPro to import statistically-generated forecasts for MRP/DRP planning.

e2b teknologies is the original developer of Sage 500 MRP software. The Company continues to develop new features for Sage 500 MRP software and now offers Anytime Supply Chain software, the next-generation cloud MRP software and cloud DRP software is available for Sage 500, Sage 300, Sage 100, Intacct Financials, Intuit QuickBooks, and other accounting and ERP business applications.
By James Mallory

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