Basic Value

[Former Member]

Hi Experts,

I want to know the following terms. Please explain me with examples.

1. Basic Value: What do you mean by basic value? Is it the original history or do we get this by any calculation? If it is through any calculation then what kind of data we take into consideration to get basic value?

2. I have seen the formula as follows:

Basic(t), trend(t), seasonal(t) = Function(actual(t), basic(t-1), trend(t-1), seasonal(t-1s))

Forecast = Function(basic(t), trend(t), seasonal(t))

Can anyone explain this as I am in confusion about.

Thanks in advance

Suvecha

[Former Member]

Suvecha,

Basic value is usually calculated by the system the first time you execute the forecast. It is calculated by the system in different ways, depending upon the model you use.

http://help.sap.com/saphelp_scm70/helpdata/EN/ac/216b74337b11d398290000e8a49608/frameset.htm

Best Regards,

DB49

[Former Member]

Hi,

1. Basic Value - Basic Value contorls the vertical placement and we calculate using the formula.

Basic Value = (History(3) + History (2)+ History (1) / 3 ) + trend

2. I can provide an example which i referred from Forecast workshop Document.

History Horizon Forecast Horizon

Period 1 2 3 4 5 6 7 1 2

History 80 95 100 115 125 110 110

G - Basic Value 102

T - Trend Value 10

Ex Ex -Post 112

F Forecast

Trend Initialization = (History (3) - History (1) )/2

Basic Value = (History(3) + History (2)+ History (1) / 3 ) + trend

Ex Post Forecast EX (t+i) = G(t) + i * T(t) Where i = 1

Please use the formula and apply the values. You will get better understanding of the calculation.

The calculation repeated for other periods as well. Pls find below the same example for repeted calculation. Here i take trend Model.

History Horizon Forecast Horizon

Period 1 2 3 4 5 6 7 1 2

History 80 95 100 115 125 110 110

G - Basic Value 102 113

T - Trend Value 10 10.3

Ex Ex -Post 112 123

F Forecast

Basic value G(t) = u03B1 V(t) + (1- u03B1) ( G (t-1) + T (t-1) )

113 = .3 (115) + (.7) (102+10.0)

u03B1 = u03B2 = Trend factor (10.3 - 10 )= .3

Trend Value T (t) = u03B2 (G(t) - G (t-1)) + (1-u03B2) T (t-1)

10.3 = .3 (113 - 102) + (.7 ) 10.0

Ex-Post Forecast Ex (t+i) = G(t) + i * T(t) where i =1

123=113 + 10.3

The calculation continues . Please take your time and apply the values in each formmula and understand. It is just the Maths behind the forecast Model.

Thanks,

Jeysraj

[Former Member]

Please copy the values into Excel. The format is not correct in the above post.

Thanks,

Jeysraj

[Former Member]

Hi Jeysraj,

Thank you for your response. I am having that document and didnt get how to understand that. SO, askied for explanation. May I know what is G(t) etc etc which the variables used in formula.

Thanks

Suvecha

[Former Member]

Hi,

G(t) = Basic value for the current period. 't' refers the current period.

T(t) = Trend value for the current period

u03B1 = u03B2 = Trend factor (10.3 - 10 )= .3 ( This is the trend factor. The forecast will keep increasing based on this trend)

Ex - Post Forecast = This is get the clear picture of history inorder to improve the forecast. In simple language split the history into two part. Compare the old history with recent history. Check the forecasted value for the period and the actual sales. Form this you can make the forecast correction and choose the fit model.

Example: History for the month Jan,Feb,Mar, April . In this case, the history is Jan and Feb and try to forecast based on the history for Mar and April. You have the actual history value already for Mar and April. Compare the difference.

History(3) (2) (1) ... You take the last three months history to calculate the basic value and so.

I hope this is helpful. It is full of mathematics and also the Forecast concepts. Try to work it out in sandbox with dummy codes. It comes out with experience.

Thanks,

Jeyanthi