SAP for Retail Discussions
Join conversations about personalization, omnichannel strategies, and operational excellence in retail using SAP for Retail software.
cancel
Showing results for 
Search instead for 
Did you mean: 

Forecast based Planning - Alpha , Beta , Gamma factors

Former Member
0 Kudos

Hi

Our client is asking for forecast based planning , but what we felt is not to give forecast based planning but a manual reorder based planning because forecasted values never be a realistic one and if you change slightly the smoothing factor like Alpha , Beta & Gamma, the result will go for a task.

Now we are in the verge of convincing the client not to go for a Forecast planning, would request you to give me some valid points say , drawbacks of forecast based planning and why people are not going for it.

or is there any standard values available for Alpha, Beta , Gamma & delta factor for First order Constant, Seasonal Model & Trend Model ( not range ) , plse provide us

Regards

Anis

4 REPLIES 4

Former Member
0 Kudos

Hi Anis

is there any standard values available for Alpha, Beta , Gamma & delta factor for First order Constant, Seasonal Model & Trend Model ( not range ) , plse provide us

If you leave Blank for Alpha, Beta, Gamma and delta in Article Master, the system takes the default value 0.2 for Alpha, 0.1 for Beta, 0.3 for Gamma and Delta that is stored in the forecast module.

Regards

Vijai Jain

Former Member
0 Kudos

Hi Anis

is there any standard values available for Alpha, Beta , Gamma & delta factor for First order Constant, Seasonal Model & Trend Model ( not range ) , plse provide us

If you leave Blank for Alpha, Beta, Gamma and delta in Article Master, the system takes the default value 0.2 for Alpha, 0.1 for Beta, 0.3 for Gamma and Delta that is stored in the forecast module.

Regards

Vijai Jain

0 Kudos

Hi anis,

Alpha, beta, gamma, delta are depends on which Forecast module do your company use....

Regards

Vijai Jain

hnmuralidhara
Active Contributor
0 Kudos

Hi,

It's your wrong assumption that clients are not using Forecast. Most of the Retails clients are effectively using forecast.

Without forecasting, Retail operation will not work at all.

A demand forecast is a prediction of the amount of each article / product that will be sold in the future. It's easy to see that inaccurate forecasts can cause major problems for your company. When forecasted demand is far below actual demand for a product, you risk running out of products and disappointing your customers. If forecasted demand exceeds actual usage, you'll probably be faced with large quantities of dead stock and slow-moving inventory.

For your company to be successful, your demand forecasts for products must be as accurate as possible.

(a) Alpha is used in the basic value calculation

(b) Beta is used in trend value calculation

(c) Gamma is used in the Seasonal index calculation

The value for the parameters range from 0 to 1. A higher value will place more emphasis on recent history. The parameters also control how reactive the forecast is to changes in historical patterns.

This is FYI.

Bye,

Muralidhara