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Difference between Demand and Order Items

Concept of demand, item and demand/item is used in SAP SPP in forecasting, safety stock calculation, etc. What is difference between demand and item for a given location product.

For e.g. in safety stock calculation, normal distributed demand is based on "demand" standard deviation, whereas Poisson distributed demand is based on "item" standard deviation.

For e.g. in forecasting the method of analyzing tripping varies for "demand" and "item". Demand, item and demand/item also influence forecast calculation rule.

If demand:final history=1000 and item final history=2 for a particular time period what does it mean?

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Former Member
Former Member replied

Hi Sandeep,

Demand - whats the total quantity ordered for that particular month. Say 3 sales order received requesting 30 qty in each for the month of APR 2014. Then your history (demand) roughly should be 90 when you see it at APR 2015.

Item - in above case, no of times we order is 3 for APR 2014. So your ITEM history is 3 on APR 2015.

Demand/Item is 90/3 = 30, same would be seen as Demand/ITEM history for APR 2015

To your question, 1000 is the total order qty for the month AND 2 is the no of SO.

Yes Poison Distribution uses the Demand/ITEM and then Demand in peaces as its required for complex calculation which suits for sproadic demand (Volatile).

Hope this answers your Question.

Just my thoughts.

Regards

Vinoth

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