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author's profile photo Former Member
Former Member

Seasonal linear regression

Hi there, APO Guru's

We have created a forecast profile that uses strategy 35.

However when we run the forecast with this model for say the last 36months of history. The system proposes an almost straight line forecast. If we run it with 18 months history then the system proposes an acceptable forecast. I can now clearly see the sales history pattern in my forecast.

We do have enough data and seasonality in our history for the 36 months to work.

Can anyone maybe shed some light on this.

We also recently upgraded to SCM 5.0

Thanks for your assistance

Robert

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    author's profile photo Former Member
    Former Member
    Posted on May 16, 2007 at 01:48 PM

    Before the system applies seasonal linear regression, it carries out a seasonal test. The system uses this test to check if the historical data contains any seasonal patterns. For this, the system determines the autocorrelation coefficient for all periods.

    If the value determined is at least 0.3, the system applies seasonal linear regression. If the value is less than 0.3, the system does not recognise a seasonal pattern and applies linear regression.

    So I think the test against your 36 months of data returns a value of less than 0.3 and hence it uses linear only, and the value for your 18 months seems to be greater than 0.3.

    (P.S. You can change this limit in the /SAPAPO/SCM_FCSTPARA BAdI – Method PARAMETER_SET)

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