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Former Member
Sep 13, 2007 at 05:57 AM

Basic and Trend Value Calculation in Trend Model of Demand Planning

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Hi All,

I am using Trend model ( Forecast Strategy 21) for generating forecast. For my learning purpose i have created a 12 months demand history from Jan-2004 till Dec 2004. I am generating forecast from Jan2005-Dec2005. As per the model initilization rules, first 3 data points are used to carry out model initialization.When i generate my forecast, I am unable to understand how the first Basic and Trend Value are calcualted i.e Basic and Trend Value for April 2004 only. If i consider the system given Basic and Trend Value for April and if i apply these 2 formula for

Basic Value <b>G(t) = G(t-1) + T(t-1) + Alpha* (V(t)-G(t-1)-T(t-1))</b>

Trend Value <b>T(t) = T(t-1) + Beta*( G(t)-G(t-1)-T(t-1))</b>

Where V(t) is the actual demand history for month t.

Alpha=0.2

Beta=0.3

Basic and Trend Value calculation, i am able to match subsequent months i.e May-Dec 2004 basic and trend value with the above calculated formula value and the system value. But i do not know how to calculate the Apil Month Basic and Trend Value.Any inputs / suggestions, please let me know. Demand history data is given below

January 60

February 77

March 83

April 96

May 105

June 120

July 100

August 94

September 84

October 77

November 60

December 55

Thanks in advance !!

regards,

Pawan.