Skip to Content
Former Member
Aug 18, 2015 at 06:30 AM

Forecast model initialization query



I am using MRP type VM. Model : Trend, History period 7, Forecast period 4, Period indicator M, Initialization X and Selection procedure 2. Lot size is EX, Service level 80%, Planned delivery time is 75 days.

Consumption values are

07.2015 56 06.2015 91 05.2015 84 04.2015 98 03.2015 91 02.2015 47 01.2015 98

Alpha 0.2 and Beta 0.1 and using First Order exponential smoothing.

Ran the forecast for 01.08.2015 and the results are as below.

Basic value 70.674, MAD 18, Safety stock 31, Trend value -3, Error Total 36, ROP 196.

Forecast values for 8th month is 68, 9th 66, 10th 63 and 11th 60.

I have understood Forecast values, Safety stock and Reorder Point.

But, the basic value, trend, MAD calculations are not matching with whatever model initialization formula provides.

If historical period is 3, then it is working as per formula. If it is >3, then, there is some other factor coming into picture, I guess.

Searched so many threads/documents in this regard and unable to understand the logic.

Can you please guide me how the model initialization happens if historical period is >3. Please also let me know how the above trend/basic values are calculated.

Thanks and Regards,