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Forecasting using inflation rates

Oct 24, 2016 at 09:45 PM

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Hi

I have a requirement to generate the forecast by applying inflation rates. Planning will be done on rolling 24 months and then these should be projected to long terms plan (5 year rolling) based on inflation rates.

My initial thought is using script logic copy the 24 months forecast to remaining 36 months and then multiply with the inflation rates. But this calculation is not very straight forward, because rate should be applied to value in previous periods.

For example

Can you please share your thoughts ?

Version is

BPC 10.1 Standard

Thank you very much.

Sincerely,

Ram

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Sorry, but the calculation logic is not clear! What values do you want to adjust using inflation rates?

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4 Answers

Vadim Kalinin Oct 26, 2016 at 09:02 AM
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You can use WHEN/REC/ENDWHEN:

*XDIM_MEMBERSET TIME=2016.JAN

*WHEN ACCOUNT

*IS ACCOUNT1

*REC(EXPRESSION=%VALUE%*((100+([ACCOUNT].[RPI],[TIME].[2017.JAN]))/100),TIME=2017.JAN)

*REC(EXPRESSION=%VALUE%*((100+([ACCOUNT].[RPI],[TIME].[2017.JAN]))/100)*((100+([ACCOUNT].[RPI],[TIME].[2018.JAN]))/100)

,TIME=2018.JAN)

...

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Raman G Oct 25, 2016 at 09:26 PM
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Hi Vadim

sorry if not very clear. Forecast should be generated by applying inflation rate to previous forecasting periods.

For example if the Plan value is 100 for Account 1 and 2016.Jan then system should the create forecast for 2017.Jan,2018.Jan....2021.Jan by applying inflation rate and the formula should be

2017.Jan = (2016.Jan * (2017 RPI /100)+2016.Jan) ie ((100*1.5%)+100)= 101.5

2018.Jan= (2017.Jan * (2018 RPI /100)+2017.Jan) ie ((101.5*1.7%)+101.5)= 103.2255

I also want to check if there a standard way of implementing inflation calculation in BPC. ie is using with some properties and with sample scripts.

Thank you

Ram

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Akos Beres Oct 26, 2016 at 08:28 PM
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Ram,

If the Inflation rate that one would like to apply is a single annual rate, the only option is script logic similar to what Vadim suggested with a few tweaks.If the inflation rates are monthly, it would be possible to use Account based business rules or script logic.

Akos

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If not monthly - the script has to be slightly adjusted. Account based calculation rule will not help to my mind.

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Vadim Kalinin Oct 26, 2016 at 08:36 PM
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There is no standard way and my formula will provide the correct result! Just try to understand the logic of my formula.

P.S. And please!!!! Read https://blogs.sap.com/2014/01/31/how-to-ask-questions-about-script-logic-issues/

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