on 11-30-2011 7:28 AM
Hello Friends,
I have 1 material with history of 36 months and I want to forecast for next 18 months. when I use the Simple linear regression model, I am not able to get forecast at all.
Outlier correction is not used. when I use the outlier correction in interactive planning and try to run the forecast, I get the forecast. But as they are using this Simple Linear regression method for bunch of materials and all the other materials are getting correct forecast, I need a proper explanation to give why this technique is not working for this particular material.
As I am new to APO, can anyone explain how this Simple linear regression method works? Also when tried in library and net, I didnot find any document on how the forecast is calculated for linear regression.
Thanks in advance for your help.
Regards
Sameer
Hi Sameer,
When you run Stat Forecasting interactively you can check in Tab 'Messages' for detail reasons why it failed to forecast.
Possible reasons why failed to forecast.
1] In SImple Linear Regression, it tries to draw a Line which is a best fit to existing data.... which passes through max data points. Here we have test called R-Square test and if it is below Limit set then R Square test failes .
2] Check if Ex- Post Forecast is negative. If so then forecasting will fail.
3] Check if you have enough history points.
Hope this helps,
Regards,
Sameer
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The issue is solved. the history was not enough for the forecast as rightly said by sameer.
We got the reply from Sap regarding this issue.
Thanks a lot for your time and assistance.
Regards
Sameer
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