Forecast Based planning (Moving average model)

[former_member205362]

Hello all,

We are implementing the forecast based planning for the consumable materials. Also we have decided the forecast model as (G) Moving average. Can any one explain how the forecast values triggered? I am sure that there should be some formulas. Also I got the formula for the moving average from help as below.

Moving average formula

M(t) =V(t)V(t-1).......V(t-n1)

-

---

n

I gave the master data information as below.

Historical. Periods 6

Forecast periods 3

Periods per season 12

My control data information

Initialization x Tracking limit 4.000

Selection procedure 1

Optimization level F

Ticked Reset Automatically

Ticked Param. Optimization

Consumption value for the 6 historical periods as below

09.2008 0 500

08.2008 0 2,500

07.2008 0 6,500

06.2008 0 3,500

05.2008 0 2,500

04.2008 0 1,000

Forecast Values for 3 periods

M 10.2008 2750

M 11.2008 2750

M 12.2008 2750

Can any one explain how this values derived with the help of the formula in detail please?

Regards,

Ganesh

[Former Member]

Dear Ganesh,

You have done forecast run and got the result as 2750.

I will try to explain this -

You have taken the moving average method.

Your forecast period is 3 and historical is 6.

You are executing forecast, system asks whether to do from current month or next month.

You have selected the next month.

By default system is on Constant with Alpha factor is 0.20 and moving average is selected.

Now system is summing of all 6 values and dividing by 6 - i.e. ( 1000 + 2500 + 3500 + 6500 + 2500 + 500 ) / 6 = 2750.

This is how system has calculated.

Srini

[former_member205362]

Hello,

Thanks for your prompt reply. yes i also calculated in the same way. In this i want another one information. for the first month 2750 but for the second and third month also it giving 2750. can you explain how this two forecast values come as 2750?

Regards,

Ganesh

[former_member205362]

Hello,

Any idea it is vital. Thanks in advance.

Regards,

Ganesh

[Former Member]

Hi GK,

As per your your forecast model G- Moving average system will calculate the average value 2750 from the past 6month.

And also it will fix the req 2750 for the next 3 months. Bcz of your Forecast periods as 3 (Next three months).

Regards,

S.Babusingh

[former_member205362]

Answered...