How many Levels of Forcasting be done in DP

[Former Member]

Hi All,

Does anyone has idea--> at how many levels , Forcasting  can be done in Demand Planning.

As per my knowledge so far i have worked in one project at 4 levels.

Is it possible to exceed the levels ?

Regards

Harsh

[satish_waghmare3 · Accepted solution]

Hello Harsh,

I do not think there is any limit for number of levels which you can use for generating Statistical Forecast. Even if there is a limit it is definitely more than what is required by most companies.  I have seen a company having their MPOS with more than 35 Planning levels(Characteristics).

It is recommended - Forecast at more aggregate level produces a more accurate forecast.  Then disaggregating the forecast to lower levels.  It is very common, Aggregate(Higher) level you will see less demand variability and lower level you will see higher demand variability.

But Planning levels for doing the forecasting should be decided based upon Business Requirements by taking Business users into consensus.

Hope this will help.

Thank you
Satish Waghmare